By Bansari Mayur Kamdar and David French
(Reuters) – Wall Street remained on course to extend gains to a fourth straight session on Wednesday after a turbulent start to the year, aided by upbeat earnings from Google-parent Alphabet and chipmaker Advanced Micro Devices.
Alphabet rose 8.5% after reporting record quarterly sales after the bell 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 later on Wednesday, rose 1.3%, while Amazon.com Inc dipped 0.7% ahead of its earnings date on Thursday.
The reassurance from strong earnings fed through into Wall Street’s fear index, the VIX, which dropped 2.6% and was on course for a fifth straight decline, after hitting a 14-month intraday peak on Jan. 24.
Last month, the tech-heavy Nasdaq fell as much as 19% 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 JP Morgan Chase & Co, Citigroup Inc and Bank of America Corp lost between 0.5% and 1.1%, while the S&P banks index was 0.3% lower.
“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.
Nine of the 11 major S&P 500 sectors were trading higher, with communication services leading gains, on the back of Alphabet’s performance. It was also aided by Match Group Inc, which rose 5.3%, as investors picked up the Tinder owner on a belief that the Omicron variant would not impact its business as much as previously feared.
Advanced Micro Devices Inc climbed 6.2% 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 1.6% and 5.9%.
By 1:43 p.m. ET (1843 GMT), the Dow Jones Industrial Average rose 134.59 points, or 0.38%, to 35,539.83, the S&P 500 gained 31.62 points, or 0.70%, to 4,578.16 and the Nasdaq Composite added 49.53 points, or 0.35%, to 14,395.53.
However, megacap growth stocks Tesla Inc and Netflix Inc dropped 2.7% and 4.9%, respectively, capping gains on the Nasdaq.
Of the 214 companies that have reported results so far during this earnings season, 77.1% of them have beaten analysts’ earnings estimates, compared with an average of 84% over the past four quarters, according to Refinitiv data.
PayPal Holdings Inc slumped 25.7% after it forecast first-quarter revenue and profit well below expectations.
The earnings weighed on other financial technology and payments firms: Block Inc, Affirm Holdings Inc and SoFi Technologies dropped between 7.9% and 10.9%.
(Reporting by Bansari Mayur Kamdar and Medha Singh in Bengaluru and David French in New York; Editing by Shounak Dasgupta and Lisa Shumaker)
