U.S. shares were set to extend gains for the fourth straight session on Wednesday after a turbulent start to the year, as Google-parent Alphabet and chipmaker Advanced Micro Devices’ shares surged following strong quarterly results.
Alphabet Inc. rose 8.2 percent after reporting record quarterly sales on Tuesday, and said it plans to undertake a 20-to-one stock split.
The stock split should make it more appealing to retail investors, said Neil Wilson, chief market analyst for Markets.com, adding that Alphabet earnings will underpin a return in confidence in beaten down technology names.
“After all the tumult of January, solid earnings can be a catalyst for gains.”
Facebook-parent Meta Platforms Inc., which is set to report results on Wednesday, rose 1.0 percent, while Amazon.com Inc., slated to report on Thursday slipped 0.7 percent.
Last month, the tech-heavy Nasdaq fell as much as 19 percent from its all-time high in November as investors dumped highly valued growth stocks on prospects of faster-than-expected rate hikes.
Traders are betting on five rate hikes this year after hawkish comments from the U.S. Federal Reserve in January.
An unexpected decline in private payrolls helped keep U.S. Treasury yields stable as investors weighed its potential impact on Friday’s broader jobs report.
Banks Citigroup Inc., Goldman Sachs Group Inc., and Bank of America Corp. lost 1 percent each.
“If we were to get a loss of jobs in the main report, that would be indicative of the fact the economy is slowing and that means lower growth,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Eight of the 11 major S&P 500 sectors were trading higher, with communication services leading gains.
Advanced Micro Devices Inc. climbed 5.7 percent after the company on Tuesday forecast 2022 revenue above expectations, following strong quarterly demand for its semiconductors, despite global supply snags.
Other chipmakers including Nvidia Corp., Qualcomm Inc., and Micron Technology Inc. rose between 2.3 percent and 1.4 percent.
At 12:20 p.m. ET, the Dow Jones Industrial Average was up 56.24 points, or 0.16 percent, at 35,461.48, the S&P 500 was up 19.77 points, or 0.43 percent, at 4,566.31, and the Nasdaq Composite was up 12.42 points, or 0.09 percent, at 14,358.42.
However, megacap growth stocks Tesla Inc. and Netflix Inc. dropped 3.0 percent and 5.6 percent, respectively, capping gains on the Nasdaq.
Of the 214 companies that have reported results so far during this earnings season, 77.1 percent of them have beaten analysts’ earnings estimates, compared with an average of 84 percent over the past four quarters, according to Refinitiv data.
PayPal Holdings Inc. slumped 25.3 percent after it forecast first-quarter revenue and profit well below expectations.
Declining issues outnumbered advancers for a 1.23-to-1 ratio on the NYSE and a 2.25-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and one new low, while the Nasdaq recorded 35 new highs and 46 new lows.
By Bansari Mayur Kamdar and Medha Singh