US Stocks Gain Ground; Meta Slumps
NEW YORK (AP) -- Stocks mostly rose in morning trading on Wall Street Thursday, but major indexes remained unsettled as more big companies report earnings.
The S&P 500 fell 0.5% as of 10:16 a.m. Eastern. The benchmark index had more gainers than losers, but a slide from several big technology stocks with outsized valuations were more than offsetting gains elsewhere.
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The tech-heavy Nasdaq fell 0.1%. Facebook's parent company Meta Platforms plummeted 21.7% after reporting a second straight quarter of revenue decline amid falling advertising sales and stiff competition from TikTok. It joins other tech and communications stocks, such as Google's parent copmany, Alphabet, and Microsoft, reporting weak results and worrisome forecasts over advertising demand.
The Dow Jones Industrial Average rose 485 points, or 1.5%, to 32,326. Construction equipment maker Caterpillar rose 9% and contributed greatly to the index's gains after it handily beat analysts' third-quarter profit forecasts.
Long-term Treasury yields fell. the The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.98% from 4.01% late Wednesday. The two-year yield fell to 4.38% from 4.42%.
Earnings have been the big focus for Wall Street this week, but markets got some encouraging economic news Thursday as the government reported the U.S. economy returned to growth last quarter, expanding 2.6%. That marks a turnaround after the economy contracted during the first half of the year.
The economy has been under pressure from stubbornly hot inflation and the Federal Reserve's efforts to raise interest rates in order to cool prices. The central bank is trying to slow economic growth through rate increases, but the strategy risks going too far and brining on a recession.
The rising interest rates have made borrowing more difficult, particularly with mortgage rates. Average long-term U.S. mortgage rates topped 7% for the first time in more than two decades this week.
The latest economic data is being closely watched for any signs of a slowdown or that inflation might be easing as Wall Street tries to determine if and when the Fed might pull back on its interest rate increases.
The central bank is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November. But traders have grown more confident that it will dial down to a more modest increase of 0.50 percentage points in December, according to CME Group.