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Market Snapshot: Dow jumps nearly 500 points, U.S. stocks end sharply higher as earnings season heats up

U.S. stocks were trading sharply higher Tuesday afternoon, as investors weighed whether a raft of corporate earnings results will help markets break out of a recent rut.

How are stock indexes performing?

The Dow Jones Industrial Average
DJIA,
+1.07%

gained 365 points, or 1.1%, to about 34,777.

The S&P 500
SPX,
+1.17%

rose 51 points, or 1.2%, to about 4,443.

The Nasdaq Composite
COMP,
+1.65%

advanced 224 points, or 1.7%, to about 13,557.

On a quiet Monday with several international markets shut, the Dow fell 40 points, or 0.1%, while the S&P 500 edged down 1 point and the Nasdaq Composite lost 0.1%. The S&P 500 has dropped for seven of the last nine sessions.

What’s driving markets?

This week is one of the busiest in the U.S. quarterly earnings reporting season, after a raft of banks posted somewhat disappointing results last week.

“I would continue to forecast solid profit growth,” despite challenges companies have been facing such as high inflation, said Greg Marcus, managing director at UBS Private Wealth Management, in a phone interview Tuesday.

Johnson & Johnson
JNJ,
+2.63%

headlined the companies reporting ahead of Tuesday’s open, and International Business Machines Corp.
IBM,
+1.87%

and Netflix Inc.
NFLX,
+2.92%

report after the close. Netflix shares have been hammered this year, skidding more than 42%, on investor concern about the company’s subscription numbers.

Refinitiv’s S&P 500 earnings scorecard estimates blended earnings growth of 6.4% during the first quarter on a year-over-year basis. Excluding the energy sector, the growth rate for the index is 0.8%, the scorecard shows.

Need to Know: Here are 30 stocks that Goldman Sachs likes when economy stutters and markets gyrate

Meanwhile, the International Monetary Fund on Tuesday said the war in Ukraine will lead to a significant slowdown in global economic growth this year, though the institution isn’t forecasting recession or stagflation for the U.S. or Europe.

The IMF said global growth would slow to a 3.6% rate this year, down from 6.1% in 2021 and 0.8 percentage points lower than in the last forecast in January. Still 3.5% growth is in line with long-run trends. The U.S. economy is expected to grow at a 3.7% rate this year, down from the prior estimate of 4%. 

U.S. economic data released Tuesday showed housing starts in March rose 0.3% from February despite high inflation and rising mortgage rates. Housing starts were up nearly 4% compared with March 2021.

“We have a massive shortage of housing in this country,” said Marcus, who is based in Washington, D.C.

Read: New-home construction improves despite high inflation, rising mortgage rates, and the shortage of skilled labor and materials

The U.S. economic calendar for today also features a speech by Chicago Federal President Charles Evans.

Which companies are in focus?

Johnson & Johnson
JNJ,
+2.63%

shares rose nearly 3% after the pharmaceutical and consumer products company topped first-quarter profit expectations but missed on revenue, and cut its full-year outlook.

American Campus Communities Inc.
ACC,
+12.58%

on Tuesday confirmed a report by The Wall Street Journal that it agreed to be acquired by Blackstone Inc. 
BX,
+4.54%

in a deal that values the student housing company at about $12.8 billion including debt. American Campus shares rose 12.6%, while Blackstone shares were were up 4.6%.

Hasbro Inc.
HAS,
+4.71%

shares rose 4.9% after the toymaker missed first-quarter profit estimates.

Twitter Inc.
TWTR,
-1.53%

was expected to turn down Tesla Inc. 
TSLA,
+1.73%

 Chief Executive Elon Musk’s offer for the social-networking company, while The Wall Street Journal reported late Monday that private-equity powerhouse Apollo Global Management Inc. 
APO,
+2.53%

was considering whether to join in a bid. CNBC later reported that Apollo’s interest was focused on lending money to potential purchasers, not on a private-equity-style buyout. Twitter shares were down 1.6%.

How are other assets faring?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.911%

was up about 4 basis points to around 2.9%. Yields and debt prices move opposite each other.

The ICE U.S. Dollar Index
DXY,
+0.12%
,
a measure of the currency against a basket of six major rivals, was up 0.1%.

Bitcoin
BTCUSD,
+1.59%

rose 1.2% to trade around $41,312.

Oil futures
CL.1,
-4.83%

pulled back from April highs, with the U.S. benchmark down about 5% to trade below $103 a barrel. Gold futures
GC00,
-1.43%

shed around 1.4% to trade at $1,959.60 an ounce.

The Stoxx Europe 600
SXXP,
-0.77%

closed 0.8% lower as European traders returned from a four-day Easter weekend, while London’s FTSE 100
UKX,
-0.20%

lost 0.2%.

The Shanghai Composite
SHCOMP,
-0.05%

posted a loss of less than 0.1%, while the Hang Seng Index
HSI,
-2.28%

fell 2.3% in Hong Kong and Japan’s Nikkei 225
NIK,
+0.69%

rose 0.7%.

—Steve Goldstein contributed to this report.

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