NEW YORK (AP) — U.S. stocks are rising Monday as some of last week’s moves driven by worries about war in the Middle East unwind.
The S&P 500 was 1% higher in morning trading and on track for its best day since the Oct. 7 surprise attack on Israel by Hamas. The Dow Jones Industrial Average was up 294 points, or 0.9%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.2% higher.
Treasury yields were climbing after falling last week on worries that fighting in Gaza will escalate. The price of gold also slipped as last week’s flight toward safer investments waned. Oil prices were lower after a volatile week spurred by worries that the war could lead to disruptions to supplies from Iran or other big crude producers.
A measure of nervousness among stock investors on Wall Street was on track for its first drop in three days as some investors look toward what’s hoped to be a better reporting season for corporate profits. More than 50 companies in the S&P 500 will tell investors this upcoming week how much they made during the summer, including Bank of America, Johnson & Johnson and Tesla.
Charles Schwab rose 5.8% after it reported stronger profit for the three months through September than analysts expected.
The broad expectation is for companies in the S&P 500 to report their first overall growth in profit in a year, though by a small margin. Last week, several banks helped kick off the reporting season with better reports than feared.
Even though the reporting season is just getting underway, analysts have seen some encouraging signals.
Companies in the Russell 1000 index that have topped profit expectations are beating the rest of the market by a relatively high rate, according to Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. She, though, also notes that corporate executives are talking about how uncertainty around inflation and interest rates are weighing on spending.
Strategists at Bank of America, meanwhile, expect this reporting season to mark “the start of earnings recovery.” Companies usually report bigger profits than analysts are forecasting, and this quarter may see them beat by double the usual margin, Ohsung Kwon & Savita Subramanian said in a BofA Global Research report.
A remarkably resilient U.S. economy has continued to power along, despite much higher interest rates instituted by the Federal Reserve to undercut inflation. With employers still adding jobs and U.S. households continuing to spend, even if they’ve become more discerning because of high inflation, earnings per share at S&P 500 companies likely rose 0.4% last quarter from a year earlier, according to FactSet.
On Wall Street, shares of Lululemon jumped 9.2% in its first trading after S&P Dow Jones Indices said the apparel company will join its widely tracked S&P 500 index. It’s replacing Activision Blizzard, which was bought by Microsoft.
Pfizer rose 4.3% after it announced a cost-cutting program that it said will save at least $1 billion in 2023. The pharmaceutical giant also said its COVID products will make $9 billion less in revenue over this year than it earlier expected.
In the bond market, the yield on the 10-year Treasury rose to 4.70% from 4.62% late Friday.
A barrel of benchmark U.S. crude fell 1.1% to $86.70. It has been bouncing up and down since charging from $70 during the summer to more than $90 late last month.
Brent crude, the international standard, slipped 0.7% to $90.25 per barrel.
Gold fell 0.5% to $1,932.60 per ounce. Last week was its best in nearly seven months as worries climbed ahead of a possible invasion by Israel of northern Gaza.
In stock markets abroad, indexes tumbled across much of Asia but were holding up better in Europe with modest gains.
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AP Business Writer Elaine Kurtenbach contributed.
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