Wall Street closed higher on Tesla’s strong earnings

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 30, 2022. REUTERS/Brendan McDermid/File Photo

July 21 (Reuters) – U.S. stocks closed higher on Thursday as electric car maker Tesla surged with stronger-than-expected quarterly results, helping offset a decline in telecoms and energy shares.

Tesla shares rose while shares of AT&T Inc (Tennessee) It fell, sending telecom stocks lower after the wireless carrier cut its cash flow forecast, saying some subscribers were delaying bill payments. Energy stocks fell on the back of weak crude oil prices. Read more

Tesla’s profits benefited from higher prices for its cars, balancing production challenges. Strong reports from the automaker and streaming giant Netflix (NFLX.O) The huge growth stocks that came under pressure were boosted by higher interest rates.

“The earnings picture may have been a little better than investors feared. We investors believe that … and there are probably some valuation opportunities,” said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management.

According to preliminary data, the S&P 500 . index (.SPX) It gained 39.39 points, or 0.99%, to close at 3999.29 points, while the Nasdaq Composite Index (nineteenth) It rose 162.94 points, or 1.35%, to 12,060.59 points. Dow Jones Industrial Average (.DJI) It rose 165.79 points, or 0.52%, to 32,036.84 points.

Falling oil prices hit the S&P 500 energy sector (.SPNY)which fell to lead declines across 11 major sectors.

Market participants continue to anxiously await the US Federal Reserve’s meeting next week as policy makers are expected to raise interest rates by 75 basis points to curb runaway inflation.

Joining its global peers, the European Central Bank raised its interest rate by 50 basis points to tame inflation in its first increase since 2011. Read more

Next week’s Fed rate decision will be followed by US Q2 GDP data, which is likely to be negative again.

According to one rule of thumb, two quarters of negative GDP growth means the United States is in a recession. Read more

The number of Americans registered for unemployment benefits rose to an eight-month high, the latest data to heighten fan fears of a recession. Read more

“Consumers are just starting to respond with less money in their pockets, either from a lower labor market in general or from higher interest rates and inflation,” Evans added.

“Part of the strong earnings reflect the earlier strength of consumers, while a lot of this broader decline we’ve seen.. over the past few months has slowed down the broader economy that will eventually affect consumers.”

(covering Echo Wang) in New York. Additional reporting by Shreyachi Sanyal and Anirudha Ghosh in Bengaluru. Editing by Aaron Coeur and Aurora Ellis

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