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Wall Street closes higher on strong Tesla gains

Wall Street closes higher on strong Tesla gains
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  • Tesla shares rise as earnings beat expectations
  • Energy stocks lead sectoral declines
  • AT&T drags down the communications services sector

July 21 (Reuters) – US stocks closed higher on Thursday as electric carmaker Tesla rose after its stronger-than-expected quarterly results, helping offset a decline in telecom and energy stocks.

Tesla shares rose while AT&T Inc (TN) fell, sending telecom stocks lower after the wireless operator cut its cash flow forecast and said some subscribers were delaying bill payments. Energy stocks slipped on weak crude oil prices. Continue reading

Tesla’s earnings benefited from a price increase on its cars, which offset production problems. Strong reports from carmaker and streaming giant Netflix Inc (NFLX.O) have buoyed megacap growth stocks that have been under pressure from rising interest rates.

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“The earnings picture was perhaps a little better than investors feared,” said J. Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management there are some rating options there.”

According to preliminary data, the S&P 500 (.SPX) gained 39.39 points, or 0.99%, to end at 3,999.29 points, during the Nasdaq Composite (.IXIC) rose 162.94 points, or 1.35%, to 12,060.59. The Dow Jones Industrial Average (.DJI) rose 165.79 points, or 0.52%, to 32,036.84.

Falling oil prices hit the energy sector of the S&P 500 (.SPNY)which led to declines in the 11 main sectors.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 30, 2022. REUTERS/Brendan McDermid/File Photo

Market participants remain anxiously awaiting next week’s Federal Reserve meeting, where policymakers are expected to hike interest rates by 75 basis points in a bid to curb runaway inflation.

The European Central Bank joined its global peers in raising interest rates by 50 basis points in its first rate hike since 2011 to tame inflation. Continue reading

Next week’s Fed rate decision will be followed by the key second quarter US GDP data, which is likely to be negative again.

According to a common rule of thumb, two quarters of negative GDP growth would mean the United States is in recession. Continue reading

The number of Americans filing for unemployment benefits rose to its highest level in eight months, the latest data that further fueled fears of a recession. Continue reading

“Consumers are just beginning to react to less money in their pockets, either through an overall contracting labor market or through rising interest rates and inflation,” Evans added.

“Some of the strong gains reflect past consumer strength, while much of this broader decline we’ve seen over the past few months has priced in a slowdown in the broader economy that would ultimately impact consumers.”

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Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Edited by Arun Koyyur and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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