The major indexes traded well into the green Tuesday, and they did so while flying into a couple of headwinds.
Rising interest rates, which have helped to keep stocks grounded of late, continued their 2022 climb, with the 10-year Treasury reaching 2.948% today as it marches toward a 3% threshold last crossed in late 2018.
Meanwhile, the corporate earnings calendar was largely a mixed affair.
Johnson & Johnson (JNJ, +3.1%) beat first-quarter earnings expectations but missed on revenues and lowered its full-year 2022 sales and profit forecasts. It did, however, announce its 60th consecutive annual dividend hike – a 6.6% bump to $1.13 per share quarterly – to extend its membership in the Dividend Aristocrats.
Defense contractor Lockheed Martin (LMT, -1.6%) sagged after delivering a bottom-line beat but missing both on Q1 revenues and its full-year 2022 sales outlook.
Insurer Travelers (TRV, -4.9%) reported a better-than-expected 48% jump in profits thanks to lower catastrophe losses, though it did suffer a decline in its ratio of claims and related costs to premiums collected.
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Also Tuesday, fresh data showed that housing permits rose 0.4% month-over-month in March to 1.873 million annualized, while housings starts were up 0.3% to 1.793 million units annualized.
“Housing starts rose solidly in March; residential construction added to real GDP growth in the first quarter,” says Bill Adams, chief economist for Comerica Bank. But he adds that supply chain issues are a huge problem for housing. “The backlog of houses that are permitted or started but not completed is the biggest since the 1970s.”
The Nasdaq Composite advanced 2.2% to 13,619, while the S&P 500 (+1.6% to 4,462) and Dow Jones Industrial Average (+1.5% to 34,911) also finished with substantial gains.
After the closing bell, Netflix (NFLX) reported its first quarterly subscriber decline in more than a decade. Shares plunged by 23% in early after-hours trading as Netflix said it suffered a Q1 loss of 200,000 subs, which kept revenues of $7.78 billion below analyst expectations. That overshadowed an easy earnings beat of $3.53 per share vs. estimates of $2.89.
Other news in the stock market today:
- The small-cap Russell 2000 continued to bounce back and forth across the 2,000 level, gaining 2.0% to 2,030.
- U.S. crude futures plummeted 5.2% to end at $102.56 per barrel, weighed on by a strengthening U.S. dollar and worries over slowing Chinese demand.
- A stronger dollar pressured gold futures too, ending the day down 1.4% at 1,959.00 …….