Asia Stocks Gain While BOJ Holds Firm

NEW YORK (AP) Wall Street climbs Friday as the market wraps up a week of sharp turns with another string of corporate earnings reports that largely beat expectations.

The S&P 500 was up 0.4% in morning trading. Despite the large swings earlier this week, it is still on track to end April with a profit. Markets are churning amid unanswered questions about where the economy and corporate earnings are headed.

The Dow Jones Industrial Average was up 138 points, or 0.4%, to 33,967, as of 10:15 a.m. Eastern Time, while the Nasdaq composite was up 0.3%.

Exxon Mobil made some of the market’s heaviest gains after rising 2.2%. It reported stronger earnings and sales for the last quarter than expected.

Intel rose 6% after reporting a milder-than-expected loss and stronger sales for the last quarter. Mondelez International, the food giant behind Oreo and Ritz, rose 5.2% after beating Wall Street estimates. It also raised its full-year revenue and profit forecast.

They helped offset a 3.4% decline Amazon, which weighed heavily on the market despite earnings and sales for the last quarter coming in stronger than expected. Analysts pointed to a slowdown in revenue growth at its AWS cloud computing business.

Snap plummeted 18.5% after last-quarter revenue fell short of forecasts. Pinterest also fell sharply, down 16.7%, despite reporting stronger than expected results. Analysts pointed to the growth forecast for the current quarter, which looked lukewarm than some had expected.

Wall Street has focused heavily on what CEOs say about their emerging trends given the high level of uncertainty about where the economy and interest rates are headed. The economy is slowing under the weight of much higher interest rates designed to bring high inflation under control.

Most companies have beat expectations so far this reporting season, but the bar was set pretty low for the first three months of the year. Wall Street is concerned that continued weakness in the second quarter of the year could lead to a third straight drop in earnings for S&P 500 companies.

Recent economic reports have bolstered expectations on Wall Street that the Federal Reserve will raise interest rates again next week. Some traders are also betting on the possibility of the Fed raising rates again in June.

A report on Friday said the inflation measure which the Fed prefers to use came close to March expectations, but remains well above target.

Employee compensation also rose more than economists had expected during the first three months of the year. While that’s welcome news for workers trying to keep up with still-rising prices at the tills, the Fed fears it could help entrench high inflation more.

Other reports said manufacturing trends in the Chicago area continue to weaken, but not as much as expected, while consumer sentiment changed little in April.

In short, inflation is still above target and the Fed is poised to raise interest rates again next week and keep them at high levels for quite some time, said Mike Loewengart, chief model portfolio construction at Morgan Stanley Global Investment Office .

High rates fight inflation by slowing down the entire economy and hurting investment prices. As a result, many investors are preparing for a possible recession that will hit sometime this year.

The Fed has raised its key overnight interest rate to the highest level since before the Great Recession of 2007-2009 after a barrage of rate hikes since the beginning of last year. Together, they have already slowed economic growth to an estimated 1.1% year-on-year at the start of this year.

They have also created cracks in the banking system, with the second and third largest US bank failures in history rocking global markets last month. Investors are looking for other weak links and the spotlight has been particularly harsh on First Republic Bank. The stock has more than halved this week after giving details of how many deposits its customers have drawn.

First Republic lost 0.7% Friday ahead of a long-awaited report from the Federal Reserve on its oversight of Silicon Valley Bank. That is the bank whose bankruptcy caused the turmoil in the sector.

In the bond market, the yield on the 10-year Treasury fell from 3.52% late Thursday to 3.46%. It helps set rates for mortgages and other important loans. The two-year rate, which is more in line with expectations for the Fed, fell from 4.08% to 4.06%.

In markets abroad, equity indices were mixed in Europe and mostly higher in Asia.

Japan’s Nikkei 225 stock index rose 1.4% and the Japanese yen fell against the dollar. At its first policy meeting under its new governor, Kazuo Ueda, the Bank of Japan kept its key policy rate at -0.1%, even as inflation in the country continues to exceed its target.

___

AP Business Writers Elaine Kurtenbach and Matt Ott contributed.