U.S. stocks rose in early Monday trading as investors considered another set of earnings reports from major companies and looked ahead to a week of key central-bank meetings.
The S&P 500 advanced 0.9% after the broad index on Friday ended higher, snapping a five-day losing streak. The blue-chip Dow Jones Industrial Average added 0.7% while the technology-heavy Nasdaq Composite Index gained 1.4%.
Big financial firms kicked off a bumper week of earnings reports Monday.
Bank of America
rose 2.4% after it said second-quarter profits declined 32%.
Goldman Sachs
advanced 5.3% after reporting better-than-expected earnings.
Synchrony Financial
rose 3.9% after reporting earnings per share that fell year-over-year but were better than analysts had expected.
Charles Schwab
gained less than 1% after reporting second-quarter profits rose by 42%, also beating Wall Street expectations.
IBM
will report later in the day. Companies due to provide updates later this week include
Johnson & Johnson
on Tuesday,
Tesla
on Wednesday and
on Friday.
Investors are trying to reconcile a dire economic outlook with earnings forecasts that remain relatively positive. Economic growth is showing signs of slowing while inflation is soaring, last week reaching a fresh four-decade high. Meanwhile, central banks are raising interest rates rapidly, adding another cloud on the economy’s horizon. So far, corporate reports have been lackluster.
“It feels like something is wrong: Either the economic story is wrong or analysts are being too optimistic on earnings, and it feels like the latter,” said Altaf Kassam, head of investment strategy for Europe, the Middle East and Africa at State Street Global Advisors. “If you scrape the text of company earnings announcements, many are complaining.”
Data due Monday were expected to show declining confidence among U.S. home builders as mortgage rates are rising. Economists surveyed by The Wall Street Journal expect the National Association of Home Builders to report a seventh consecutive month of declining confidence in July.
The European Central Bank is expected to raise interest rates for the first time in 11 years at a meeting Thursday. The region’s economy is feeling the effects of the war in Ukraine and an energy crisis more acutely than other economies. The Bank of Japan is expected to buck the trend among global central banks and keep rates unchanged on Thursday.
The Federal Reserve has signaled it will raise interest rates by 0.75 percentage point for the second time in a row later this month.
Commodity prices rebounded following a stretch of weakness. Brent crude, the international oil benchmark, rose 3.8% to $105.03 a barrel. Copper prices in London rose 2.6% to $7,362 a metric ton. Gold prices rose 0.6%.
In bond markets, the yield on the benchmark 10-year U.S. Treasury note rose to 2.978% from 2.929% on Friday. Bond yields and prices move in opposite directions.
Traders worked on the floor of the New York Stock Exchange last week.
Photo:
Michael M. Santiago/Getty Images
Overseas, global markets were higher across the board. In Europe, the pan-continental Stoxx Europe 600 rose 1.1%. Oil-and-gas and mining stocks led the gains as commodity prices rose, while banks also rose. Commodity trader and miner
Glencore
rose 2.5% while oil major
Shell
gained 2.6%. Germany’s
Commerzbank
and
Deutsche Bank
each rose around 4%.
In Hong Kong, the Hang Seng Index jumped 2.7% while in mainland China, the Shanghai Composite Index rose 1.6%. Markets in Japan were closed for a holiday.
—Pia Singh contributed to this article.
Write to Will Horner at william.horner@wsj.com
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