Stocks are ending higher on Wall Street Friday as investors closed out the best month for the S&P 500 since November 2020. New data showed inflation rose the most in four decades last month , but sentiment was buoyed by positive earnings news from tech giants Apple. and Amazon, as well as oil giants Exxon and Chevron. The tech-heavy Nasdaq ended July with its biggest gain since April 2020. Stocks have gained momentum this month, boosted by better-than-expected corporate earnings and falling bond yields, which they have pulled back after shooting up much of this year on bullish expectations. interest rate
(asterisk)(asterisk)(asterisk)(asterisk) THIS IS A BREAKING NEWS UPDATE. The previous AP story appears below. (asterisk) (asterisk) (asterisk) (asterisk)
Stocks added to their recent gains in afternoon trading Friday as Wall Street weighed a combination of corporate earnings reports and new data showing inflation rose by the most in four decades last month.
The S&P 500 was up 1.3% at 2:18 p.m. ET, while the Nasdaq was up 1.6%. Both indexes are on pace to end July with their biggest gains since November 2020. The Dow Jones Industrial Average rose 0.8%.
Positive earnings news from Apple and Amazon, as well as oil giants Exxon and Chevron, helped put traders in a buying mood.
Stocks’ gains for the month were boosted by better-than-expected corporate earnings reports and falling bond yields, which have pulled back after soaring much of this year against expectations of higher interest rates.
Weak economic data, including a report on Thursday showing the U.S. economy contracted last quarter and may be in recession, have also spurred stocks higher, giving some investors confidence that the Federal Reserve it will be able to slow down its aggressive pace of rate hikes sooner. than expected
The central bank raised its key short-term interest rate by 0.75 percentage points on Wednesday, taking it to the highest level since 2018. The Fed is raising rates to try to slow the US economy and curb the highest inflation in the last 40 years.
An inflation gauge closely followed by the Federal Reserve rose 6.8 percent in June from a year ago, the biggest increase in four decades, leaving Americans without relief from rising prices. Month-on-month inflation accelerated to 1% in June from May’s 0.6% monthly increase, the Commerce Department said on Friday.
The numbers underscored the persistence of inflation that is eroding Americans’ purchasing power, eroding their confidence in the economy and threatening Democrats in Congress heading into November’s midterm elections.
However, some market watchers advised against putting too much emphasis on the June data.
“This inflation metric is for June and we know a lot has changed since then, especially gas prices, so investors should put this inflation report in historical context,” said Jeffrey Roach , chief economist at LPL Financial. “Looking ahead, July inflation rates will ease slightly from the previous month, as food and energy costs should ease in July.”
Still, inflation weighed on one company’s earnings Friday: consumer staples giant Proctor & Gamble. Shares of laundry detergent maker Tide fell 5.3% after the company said consumers were cutting back, but the company’s recent price hikes kept profits under wraps.
Other earnings reports from the company were more encouraging.
Exxon and Chevron posted record quarterly profits last quarter amid high oil and gas prices. The two companies made $46 billion last quarter and roughly four times the amount of money these two companies made in the same period a year earlier. Chevron shares rose 8.5% to a six-week high, while Exxon rose 4.4%.
Amazon rose 12.1% after the company posted a quarterly loss, but its revenue rose sharply in the quarter.
Apple rose 3.4% after its quarterly earnings came in better than Wall Street expected. The iPhone maker saw its April-June profit fall 10% while revenue rose 2% as it struggled with manufacturing headaches and inflationary pressures.
In the bond market, returns were mixed. The two-year Treasury yield, which tends to move with Fed expectations, rose to 2.89% from 2.87% late Thursday. The 10-year yield, which influences mortgage rates, fell from 2.67% to 2.64%.
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