US stocks rise after strong earnings reports | Nation and World

Stocks closed higher on Wall Street on Wednesday as investors scrutinized a generally encouraging batch of earnings from big companies. The S&P 500 rose 1.6% to hit a nearly 2-month high. Nasdaq and Dow Jones industrial stocks also rose. Starbucks and CVS closed higher after posting strong quarterly results. PayPal shares soared following a report that activist investor Elliott Management took a large stake in the payments company. The 10-year Treasury yield slipped. Oil prices fell after the OPEC oil cartel and its allies decided to increase production in September at a much slower pace than in previous months.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier history appears below.

Wall Street stocks extended their gains in afternoon trading on Wednesday as investors scrutinized a rather encouraging batch of quarterly earnings from several major companies.

The S&P 500 was up 1.7% at 3:02 p.m. EST. The Dow Jones Industrial Average rose 453 points, or 1.4%, to 32,850 and the Nasdaq rose 2.7%.

The indices more than recouped their losses earlier in the week. Tech companies, retailers and communications companies were among the biggest winners. Only shares in the energy sector fell, dragged down by lower oil prices.

Small company stocks also gained ground, pushing the Russell 2000 up 1.4%.

Investors applauded a report on the services sector, which makes up the bulk of the US economy. The sector grew faster than expected in July, according to the Institute for Supply Management.

“It just provides people with more evidence that this economy is hanging over there,” said Jeff Buchbinder, equity strategist for LPL Financial. “At this point, we have a combination of evidence that inflation is down.”

The yield on the 10-year Treasury rose from 2.73% to 2.75% on Tuesday evening.

Earnings remain the focus this week as investors analyze the latest earnings results and corporate statements to better understand how inflation is affecting businesses and consumers.

Drugstore chain CVS rose 6.4% after posting strong financial results and raising its profit forecast for the year. Starbucks rose 4.6% after also posting strong financial results. Nearly three-quarters of companies in the benchmark S&P 500 reported earnings for the last quarter and results mostly beat analysts’ forecasts.

Several companies, however, slipped amid disappointing results. Taco Bell owner Yum Brands fell 1.7% on a weak earnings report and online dating services firm Match Group lost about a fifth of its value after giving investors weak financial forecasts.

PayPal jumped 8.9% following a report that activist investor Elliott Management took a large stake in the payments company.

Robinhood Markets, whose stock trading app has helped attract a new generation of investors to the market, rose 11.9% after it announced it was cutting nearly a quarter of its workforce. Falling cryptocurrency prices and a turbulent stock market have kept more customers from its app.

Oil prices fell following OPEC’s decision to increase production in September at a much slower pace than in previous months. U.S. crude fell 4% to $90.66 a barrel, while Brent, the international standard, settled down 3.7% to $96.78 a barrel.

Falling oil prices weighed on energy stocks. Hess fell 3.2%

Markets are also watching for potential economic fallout from China following US House Speaker Nancy Pelosi’s visit to Taiwan. China claims self-governing Taiwan as part of its territory and has banned imports of Taiwanese citrus fruits and frozen fish in retaliation for Pelosi’s visit. But he avoided disrupting the flow of computer chips and other industrial goods, a step that could shake up the global economy.

Upcoming labor market data could help investors determine how the Federal Reserve will continue with its aggressive interest rate policy in an attempt to keep inflation under control. US unemployment claims figures for the past week will be released on Thursday, and the government will release its July jobs report on Friday.

“Expectations for Fed rate hikes may have gotten a little too aggressive,” Buchbinder said. “We don’t know if we’ll have a break by the end of the year, but chances are we’ll get a signal for a break by the end of the year.”

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Garland K. Long