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Stocks rise after days of back-to-back losses

Stocks rise after days of back-to-back losses
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U.S. stocks rose Wednesday and rebounded this week’s losses as investors weathered the earnings season and aggravated by upbeat economic data from the services sector.

The S&P 500 rose 1.6% and the Dow Jones Industrial Average rose 450 points, or roughly 1.4%. The tech-heavy Nasdaq Composite rose 2.6 percent.

Bonds also came to the fore after the hawkish Fedspeak on Tuesday, with benchmark 10-year Treasury yields nearing 2.8% and 2-year yields exceeding 3.1%.

Economic data released Wednesday that showed the US services sector rebounded in July helped raise sentiment. The ISM Services PMI climbed 56.7 percent last month from its June reading of 55.3 as supply chain issues appear to have eased.

ancestry (HOOD) shares rose more than 13% a day after the brokerage said it would lay off about a quarter of its staff and reported a sixth-quarter loss in a row.

CVS Shares (resume) the pharmacy chain gained 5% after reporting earnings that exceeded estimates and raising full-year guidance.

Starbucks (SBUX) rose 3% after the coffeehouse announced its fiscal third-quarter earnings late Tuesday. It largely beat Wall Street forecasts, though. inflationary pressures, labor costs, unionization efforts and the search for a permanent CEO that overshadowed the quarter.

Meanwhile, AMD shares (AMD) fell about 4% after a warning from the chipmaker. worse-than-expected third quarter Tuesday is late.

Analysts are cutting above-average earnings per share estimates for S&P 500 companies for the third quarter as economic data shows signs of slowing down and companies continue to darken their outlook. Wall Street slashed its consensus bottom-up EPS estimate by 2.5% from June 30 to July 28, according to data from FactSet. The average decline in the bottom-up EPS estimate in the first month over the past five years – or 20 quarters – was 1.3 percent in the quarter.

The exterior of the Marriner S. Eccles Federal Reserve Board Building seen on June 14, 2022 in Washington, DC, USA.  REUTERS/Sarah Silbiger

The exterior of the Marriner S. Eccles Federal Reserve Board Building seen on June 14, 2022 in Washington, DC, USA. REUTERS/Sarah Silbiger

In commodity markets, OPEC and its allies gave the green light to a small increase in oil production of around 100,000 bpd after calls from the US and other major consumers for more supply. The move, though symbolic, is expected to have little impact on prices. Crude fell from its afternoon high, with WTI (CL=F) at just over $92 per barrel and Brent (BZ=F) at around $98.20.

Wednesday’s moves follow a bearish day on Wall Street that saw stocks close lower for a second consecutive session during a high-risk visit Speaker of the House of Representatives Nancy Pelosi’s statement to Taiwan raised concerns about US-China relations.

Investors on Tuesday intimidated the hawkish Fedspeak, who suggested that the central bank’s efforts to curb inflation continue. San Francisco Fed President Mary Daly said on Tuesday that policymakers “stable and fully unifiedChicago Fed President Charles Evans told reporters that officials are “at least a few reports away” from seeing enough improvement in inflation data to slow the pace of walking rates.

Meanwhile, St. Louis Federal Reserve Chairman James Bullard said the US Federal Reserve and the European Central Bank could still achieve a “relatively soft landing” while tightening monetary conditions.

Eric Theoret, Global Macro Strategist at Manulife Investment Management, told Yahoo Finance Live on Tuesday, “I think the story for markets is still ‘What’s going on with the Fed? What’s going on with compression?’ “When it comes to geopolitics, it’s not really driving market action right now.”

Alexandra Semenova is a correspondent for Yahoo Finance. follow him on twitter @alexandraandnyc

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