Stocks rose on Wednesday as Wall Street struggled to extend its rally despite another strong boost from corporate earnings.
The Dow Jones Industrial Average added 108 points, or 0.4%. The S&P 500 and Nasdaq were up 0.1% each.
The tepid moves came even as Netflix shares surged 15% after the streaming giant Reported earnings and revenue that beat estimates and strong subscriber growth for the third quarter. United Airlines jumped more than 7% after also beating estimates on the top and bottom lines.
The strong start to earnings season comes as many on Wall Street have reset their earnings forecasts lower, and investors are concerned about a recession. Despite the stock rally in the first two days of the week, Treasury yields remain high and rose on Wednesday, indicating that recession fears remain.
The 10-year Treasury yield jumped to 4.073% on Wednesday.
“On the plus side, corporate earnings season may help investor confidence somewhat, just given the current oversold conditions and lower expectations. That should help stocks maintain a foothold, but until we see 2 year and 10 year returns starting to come in. Down, we believe traders “should remain wary of expecting too much of this rally,” said Nick Colas of DataTrek Research.
Among the biggest losses on the Nasdaq was Chinese tech stock JD.com, down more than 4%. Abbott Labs was one of the worst performers in the S&P 500, falling more than 7% despite beating expectations for the third quarter.
Tech earnings will be in full swing next week, but IBM and Tesla are about to announce on Wednesday. Social media company Snap will report back later in the week.
In economic data, investors are looking forward to housing starts on Wednesday. It will also release the so-called “Beige Book” of the Federal Reserve, which is the central bank’s report on the current state of economic conditions.
Wednesday’s moves came after another strong day for stocks, with the Dow Jones climbing nearly 337 points on Tuesday, and the S&P 500 up 1.1%.
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