Dow Futures Rise, Tesla Surges, Tech Bounces Back—and What Else Is Happening in the Stock Market Today

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Federal Reserve Chair Jerome Powell will speak alongside other central bankers at a panel.

Samuel Corum/Getty Images

Stocks were rising Thursday, as earnings across the board continued to beat expectations, while bond yields remained below their recent high. It seems everything is going right for the stock market this week.

Futures for the Dow Jones Industrial Average rose 239 points, or 0.7%, after the index ended 249 points higher on Wednesday. S&P 500 futures signaled a start 0.9% higher, with the  Nasdaq Composite poised to climb 1.2%.

“Futures are moderately higher as earnings continue to come in better than expected,” wrote Tom Essaye, founder of Sevens Report Research. 

With almost a fifth of the S&P 500’s market capitalization having reported earnings for the first quarter of the year, the aggregate earnings per share result has beaten the estimate by 8.6%, according to Credit Suisse data. Three-quarters of companies are beating expectations by any margin. 

That’s certainly aiding the market gains. Companies that beat profit expectations are seeing their stocks outperform the S&P 500’s movement by 0.2 percentage points, according to Wells Fargo data. 

But that’s not the only reason stocks are gaining. That number shows how those stocks are performing relative to the broader market. And the market, itself, is gaining a lot. Including Thursday morning’s move, the S&P 500 is up just over 2% for the week. 

One key for the market is that investors couldn’t have gotten more pessimistic than they were coming into the week. That means, historically speaking, buyers who had been on the sidelines come back into the market and send stocks upward. Data from Evercore strategists showed that pessimism found in a major survey of investors hit its lowest level in decades. That usually precedes a gain in the S&P 500 for the following three months. 

That pessimism stems from several key issues. The Federal Reserve is working to bring down hot inflation by raising interest rates and soon reducing its bondholdings. That would drive less money into the bond market, lowering their prices and lifting their yields. So the 10-year Treasury yield has soared, which makes future profits for companies less valuable, sending stocks in the S&P 500 down for the year. 

Now, the 10-year yield, at 2.87%, has remained below its pandemic-era closing high of 2.94% for two straight days. Some on Wall Street are beginning to anticipate a slower rise in the yield, which is helping the stock market. 

Overseas, the pan-European Stoxx 600 was 0.8% higher, and Tokyo’s Nikkei 225 ended 1.2% into the green.

Here are seven stocks on the move Thursday:

Tesla (ticker: TSLA) stock jumped 7% in premarket trading, after the electric-vehicle maker earned $3.22 per share from $18.8 billion in sales in the first quarter of the year. The record results firmly outpaced Wall Street’s expectations of EPS in the range of $2.20 to $2.30.

Strong results from Tesla also boosted Chinese rivals NIO (NIO), XPeng (XPEV), and Li Auto (LI), which all gained 2% to 3% in the premarket.

After a 35% drop on Wednesday, Netflix (NFLX) shares were down another 1% in the premarket. Streaming peer Roku (ROKU), which saw its stock fall 6.2% on Wednesday, was nearly 1% higher after its decline attracted funds managed by ARK Invest CEO Cathie Wood.

Nestlé (NESN.Switzerland) rose 1.2% in Zurich trading, after the food and drinks giant beat expectations for first-quarter revenue and guided for earnings to increase in 2022.

Write to Jack Denton at jack.denton@dowjones.com and Jacob Sonenshine at jacob.sonenshine@barrons.com