By Sruthi Shankar
(Reuters) – Wall Street stocks rose on Thursday, as strong earnings from Facebook and a handful of chipmakers powered technology stocks, and U.S. bond yields pulled back.
The tech-laden Nasdaq Composite index opened more than 1 percent higher, on track to break its five-day losing streak, its longest since November 2016. The S&P technology index rose 1.4 percent, the biggest gainer among the 11 major S&P sectors.
Facebook jumped 7.6 percent after strong results calmed nerves on fallout from the Cambridge Analytica privacy scandal.
Visa’s 3.1 percent jump, following the payments network’s better-than-expected profit and earnings forecast raise, provided the biggest boost to the Dow Jones Industrial Average index.
Advanced Micro Devices and Qualcomm were up 11.5 percent and 2.1 percent after the chipmakers posted quarterly results that beat Wall Street estimates, easing concerns about weak demand for smartphones after some Asian peers warned of slower growth.
The gains pushed the Philadelphia Semiconductor index up by more than 1 percent.
“We are right in the thick of earnings season and some of them have been a bit of a surprise,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
Despite strong results from most U.S. firms that have reported so far, investors have been reacting to signs that rising inflation could take a toll on corporate profits.
The 10-year U.S. Treasury yield, the benchmark for global borrowing costs, crossed the 3 percent level on Tuesday for the first time in four years, on an increase in federal borrowing, inflation concerns and bets on further rate increases by the Federal Reserve.
However, the 10-year yield pulled back slightly to trade at 2.9847 percent.
“A slight pullback in yields is likely to give investors a chance to focus on corporate results,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 9:54 a.m. ET, the Dow Jones Industrial Average was up 84.36 points, or 0.35 percent, at 24,168.19, the S&P 500 was up 11.18 points, or 0.42 percent, at 2,650.58 and the Nasdaq Composite was up 60.25 points, or 0.86 percent, at 7,063.98.
Of the 154 S&P 500 companies that reported first-quarter earnings as of Wednesday, 81.2 percent topped profit estimates. Analysts now expect earnings growth of 22 percent, according to Thomson Reuters data.
Industrial stocks took a hit after Union Pacific’s 3.6 decline as the No. 1 U.S. railroad warned on a key operating metric.
General Motors also fell about 2.4 percent after it reported a lower quarterly profit.
AT&T was down 4.9 percent after the No. 2 U.S. wireless carrier reported a lower-than-expected profit as the company lost subscribers from its pay TV business.
Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the NYSE and by a 1.48-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and seven new lows, while the Nasdaq recorded 30 new highs and 24 new lows.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)