Rise in Asian stocks widely cheered by US earnings, rally | World

TOKYO (AP) — Asian stocks gained on Friday as investors cheered a strong set of retail earnings that lifted U.S. stocks.

Benchmarks rose in early trading across the region, including Japan, China, Australia and South Korea.

“Improving risk sentiment on Wall Street, along with earnings outperformance from Alibaba and Baidu, could help fuel some upside for the Asia region in today’s session,” Yeap Jun said. Rong, market strategist at IG in Singapore.

Shares of Alibaba and Baidu surged after reporting better-than-expected results, allaying concerns about the negative impact of restrictions aimed at curbing COVID-19 infections. Both stocks continued to rise in early trading.

Assessing Japan’s economic trajectory will be on investors’ minds as manufacturing, housing and employment data for April is expected to be released next week. Some analysts expect the numbers to be weak due to a slowdown in exports to China during this period.

But some optimism is also in the air, with Tokyo easing restrictions on tourists and the daily cap dropping from 10,000 people entering to 20,000 from June 1. The Japanese government, led by Prime Minister Fumio Kishida, is also expected to push forward parliamentary talks. with an additional budget, another possible plus for investors.

Japan’s benchmark Nikkei 225 added 0.8% in early trading to 26,811.06. Australia’s S&P/ASX 200 gained 0.9% to 7,167.70. The South Korean Kospi jumped 1.0% to 2,638.92. Hong Kong’s Hang Seng jumped 2.8% to 20,687.39, while the Shanghai Composite edged up 0.6% to 3,141.15.

Wall Street ended broadly higher after seven straight weeks of decline, the longest such stretch since 2001.

Bond yields have risen. The 10-year Treasury yield, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.

About 90% of S&P 500 stocks rose, with technology companies, banks and retailers driving much of the rally. While trading remained choppy this week, the market mostly pushed higher, unlike the past five weeks, when the S&P 500 saw declines of 2% or more on at least one day a week.

“It’s nice to see a few days in the green, and this could actually end up being the first week where we don’t have a huge day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn’t declare a premature victory and assume we’re in the clear.”

The S&P 500 rose 79.11 points, or 2%, to 4,057.84. The Dow Jones added 516.91 points, or 1.6%, to 32,637.19, and the Nasdaq rose 305.91 points, or 2.7%, to 11,740.65. The Russell 2000 Small Business Index climbed 39.07 points, or 2.2%, to 1,838.24.

Retailers led the broader market higher on Thursday. Macy’s jumped 19.3% after raising its full-year profit forecast following a strong first-quarter financial report. Dollar General jumped 13.7% and Dollar Tree jumped 21.9% in the S&P 500’s biggest gain after discount retailers reported strong earnings and gave investors encouraging forecasts.

The retail sector is being watched closely by investors looking for more details on the pain inflation is inflicting on businesses and consumers. Weak reports from several major companies last week, including Target and Walmart, spooked an already volatile market.

“We’re not convinced we’re completely off the hook here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There have been a lot of negative reports in the last week and what these companies have been talking about is what’s going on in the economy.”

Inflation hit its highest level in four decades, and businesses raised prices for everything from food to clothing to offset rising costs. The impact of Russia’s invasion of Ukraine added to inflationary pressures by fueling higher energy and major food prices. Supply chain issues worsened following China’s lockdown of several major cities as it tried to contain COVID-19 cases.

Consumers have shown resilience on spending, but inflation pressure remains lingering and could lead to a pullback or shift in spending away from the most expensive things towards basic necessities.

Thursday’s large gains followed a late surge in markets on Wednesday, driven by details from the Federal Reserve’s latest meeting, which confirmed expectations for further interest rate hikes.

Tech stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their high stock values, tend to push the market harder up or down.

Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue 3.4%.

In energy trading, benchmark U.S. crude added 36 cents to $114.45 a barrel. US crude oil prices rose 3.4% on Thursday and are up more than 55% for the year. Brent, the international standard, rose 45 cents to $117.85 a barrel.

In currency trading, the US dollar fell slightly to 126.79 Japanese yen from 127.10 yen. The euro traded at $1.0763, down from $1.0733.


AP trade writers Damian J. Troise and Alex Veiga contributed.

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