By Damian Troise and Alex Veiga
October 18, 2022 — 5.28am
Stocks are marching higher on Wall Street in afternoon trading on Monday, in the latest about-face for a market that has been unsteadily lurching between gains and losses.
The S&P 500 is up 2.9 per cent in mid-afternoon trade. Nearly every stock in the benchmark index rose, with the gains more than making up for its losses last week. The Dow Jones Industrial Average is 2.2 per cent higher and the Nasdaq has gained 3.6 per cent.
Wall Street has surged higher to kick off the week. Credit:NYSE
The Australian sharemarket is set to rise, with futures at 5.06am AEDT pointing to a jump of 62 points, or 0.9 per cent, at the open. On Monday, the ASX slumped by 1.4 per cent.
Technology and communications companies accounted for some of the biggest gains on Wall Street. Apple climbed 2.9 per cent and Google’s parent company rose 4.5 per cent.
Bond yields eased back from their multiyear highs and took some pressure off of stocks. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.99 per cent from 4.02 per cent late Friday. The yield on the 2-year Treasury, which tends to track expectations for future Federal Reserve action, fell to 4.44 per cent from 4.50 per cent late on Friday.
UK government bonds rallied following news that the country’s new Treasury chief was abandoning nearly all of a series of unfunded tax cuts that had upset markets. Markets in Europe were broadly higher and most markets in Asia gained ground. Oil prices rose.
The broader market is coming off of an extremely volatile week that closed with most major indexes in the red. Investors remain worried about hot Inflation and the potential for a recession to hit the US and global economy. The big concern is the Fed’s aggressive policy to raise interest rates to cool inflation, which could go too far and slow the economy so much that it slips into a recession.
Wall Street turns its focus this week to the latest round of corporate financial results. The earnings reports and financial updates could help give investors a clearer picture of how companies and consumers have been dealing with inflation. Investors will also be listening closely to any statements from corporate leaders focusing on inflation’s potential path ahead and the forecasted impact on business.
Bank of America jumped 6.3 per cent after reporting earnings that beat forecasts.
Several major airlines, which could see some turbulence in their finances if inflation hits consumers’ travel spending, will report earnings this week. United Airlines releases its results on Tuesday, followed by American Airlines on Thursday.
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Other big names reporting earnings this week include Johnson & Johnson, Netflix, Union Pacific and American Express.
Several companies gained ground Monday on a mix of specific corporate news. Oil producer Continental Resources jumped 8.4 per cent after saying it will be taken private as part of a deal with founder Harold G. Hamm.
Investment bank Credit Suisse rose 4.7 per cent after agreeing to pay $US495 million ($787 million) as part of a settlement in a dispute with the US over mortgage-backed securities.
AP
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