Stocks rose Tuesday morning as Wall Street looked away from more China covid lockdowns and instead focused on a number of strong earnings reports and declining rates during a short week of holiday trading. of Thanksgiving.
The Dow Jones Industrial Average rose 330.7 points, or 1%. The LS&P 500 and the Nasdaq Composite rose 1% and 0.84%, respectively.
Mixed earnings results led to a few big stock moves – Best Buy fell 12.8% after the electronics retailer raised its fiscal 2023 outlook and beat earnings expectations, while Zoom fell 5.4% and Dollar Tree fell about 9% after reporting disappointing earnings and lower revenue. returns than expected, respectively. Stocks were helped by softening bond yields as investor attention turned to 2023.
China saw its first mainland deaths from Covid since May at the weekend. This raised fears among investors that the country could roll back restrictions designed to slow the spread of the virus, which would hurt business. Only a week ago the country began to ease some of its strict covid measures, on its way to a more relaxed policy.
China’s reopening would be “extremely growth positive,” according to Seema Shah, chief global strategist at Principal Asset Management.
“As ever, investors should cautiously monitor developments as faithful execution of the reopening plan will be key to investment prospects,” it said in a Tuesday note.
Investors also weighed comments from Federal Reserve leaders. On Monday, Cleveland Fed President Loretta Mester said that recent inflation data is promising and that she supports modest increases in interest rates going forward. This could mean that the Fed will reach its terminal rate, between 4% and 5%, soon.
“This is a huge weight off the shoulders of investors who have had absolutely nowhere to hide this year,” said Phil Camporeale, managing director and asset manager at JPMorgan Asset Management on “Squawk on the Street” of Tuesday.
Stocks fell on Monday, with the Dow losing 45 points, while the S&P 500 and the Nasdaq Composite fell 0.4% and 1.1%, respectively. Losses on the Dow were kept in check by a 6.3% gain in Disney following the return of Bob Iger as CEO.
On Tuesday, several Federal Reserve officials will speak, including Kansas City Fed President Esther George and St. Louis Fed President. Louis James Bullard.
Economic reports due out include the Philadelphia Fed’s services sector survey and the Richmond Fed’s manufacturing index.
Investors are also watching earnings reports from HP Inc and Nordstrom after the bell. The stock market will be closed on Thursday for the Thanksgiving holiday and will close early on Friday.