The US stock market is rising Wednesday following strong profit reports from SpaceX, Capital One Financial, and other big companies.
The S&P 500 added 0.4 per cent and pulled within 1 per cent of its all-time high set earlier this month. The Dow Jones Industrial Average was up 171 points, or 0.3 per cent, with an hour remaining in trading, and the Nasdaq composite was 0.9 per cent higher.
SpaceX helped lead the market and climbed 7.2 per cent after reporting a stronger profit for the summer than analysts expected. Elon Musk, who runs the company that makes money from artificial-intelligence technology, rockets, and other businesses, also said that SpaceX took a step to consider a possible merger with Tesla, his electric-vehicle company.
Tesla rose 3.3 per cent ahead of its own earnings report scheduled for late Wednesday and was one of the strongest forces lifting the S&P 500.
Other stocks rallying on profit reports that topped analysts’ expectations included Capital One Financial, which rose 2.7 per cent, and Winnebago Industries, which climbed 7.8 per cent.
Expectations are high for profit growth during the summer, and companies will need to meet them to justify the big runs their stock prices have made towards records despite worries about high inflation, higher interest rates, and other challenges weighing on Wall Street.
Winnebago was able to report a more resilient profit than analysts expected even as high fuel prices and frustration among US shoppers restrain interest in recreational vehicles, for example. CEO Michael Happe said its more expensive towable RVs are a tougher sell, but customers are interested in its “more accessible” offerings.
On the losing side of Wall Street was Netflix, which fell 4.9 per cent even though the streaming service reported a stronger profit than analysts expected. Investors focused instead on worries that Netflix’s momentum may be slowing. The company’s forecast for revenue growth in the final three months of the year fell short of analysts’ expectations.
AT&T fell 5.7 per cent even though it likewise delivered a stronger profit for the latest quarter than analysts expected. It gave a forecast for growth this year in an underlying measure of earnings before income taxes and some other things that fell short of some analysts’ expectations.
Among AI stocks, which have been at the centre of the market’s action in recent weeks, the movements remained unsettled.
After leading the rest of the market for years because of the frenzy around AI, stocks in the industry have become shaky on worries that the build-out of data centres may slow because of how much more expensive it has become to borrow money.
CoreWeave, which has borrowed money to buy AI chips that it rents out to customers over the cloud, has been particularly volatile. It bounced between an early gain of nearly 4 per cent and a drop of 4.5 per cent Wednesday morning before moderating to a dip of 0.5 per cent. A day earlier, it had careened between similarly wide gains and losses.
Other AI-linked stocks were more resilient. Nvidia’s rise of 1.9 per cent was the strongest force lifting the S&P 500.
Besides SpaceX’s profit report showing strength for AI spending, another encouraging signal for the industry came from Super Micro Computer, which sells AI servers and services. It said it expects to report stronger revenue for the summer than it had earlier forecast because of “increased demand for AI platforms”, and its stock rallied 8.5 per cent.
In the bond market, the yield on the 10-year Treasury erased an early dip and rose to 5.14 per cent from 5.12 per cent late Tuesday.
It swung with oil prices, which remained unsteady on Wednesday. The price for a barrel of Brent crude drifted between US$108 and US$111 before settling at US$108.82. Through October, it has been yo-yoing between $97 and $112 on uncertainty about when the war with Iran will allow the global energy industry to return to normal.
In stock markets abroad, indexes rose in Europe following a mixed finish in Asia. South Korea’s Kospi jumped 3.3 per cent for one of the world’s biggest moves as AI stocks regained strength.
AP
