Relief rally on Wall Street after better-than-feared…

Relief rally on Wall Street after better-than-feared earnings

Shares of Facebook parent Meta rocketed higher following strong results . ©AFP

New York (AFP) - Wall Street stocks shook off recent weakness and powered higher on Thursday following strong results from Facebook parent Meta Platforms and mixed US economic data.

Shares of Meta surged around 14 percent as it reported a profit of $5.7 billion in the first quarter -- the latest favorable results by a US tech giant -- prompting relief in the market following earlier fears that the sector might sputter.

Solid results from Meta, as well as Microsoft and Alphabet earlier in the week, "helped foster a sense of relief that the mega-cap leaders are still performing relatively well from an operational standpoint and maintaining their position as market leaders," said Briefing.com.

Following a muted session on European and Asian bourses, US stocks enjoyed their best day in weeks.The S&P 500 finished two percent higher.

Art Hogan, an analyst at B. Riley Financial, said investors were also heartened by US gross domestic product data that showed strong consumer spending, even if the headline figure disappointed.

Further "the worst of the regional bank turmoil is likely in the rear mirror," said Hogan, noting that most US lenders released earnings that were reassuring.

"It doesn't feel like the market is expecting some contagion," Hogan said.

After two straight routs, First Republic Bank mustered an 8.8 percent gain.Other regional banks also closed higher.

With markets having digested the busiest stretch of earnings, the focus turns next to the Federal Reserve's monetary policy meeting next week.

Yields on US government debt rose after US data was released, suggesting that the market expects the Fed to consider strong consumer spending in the first quarter as well as a drop in weekly jobless claims on Thursday as evidence that the economy can take more interest rate hikes.

Elsewhere, oil prices rose modestly, bouncing from the prior session's rout.

Japan's Nomura bank saw its share price plunge more than seven percent after announcing its profits tumbled 76 percent to $55.3 million in the last quarter.

But British bank Barclays rallied more than five percent, topping London's benchmark FTSE 100 stocks index, thanks to a jump in quarterly profits.

Back in New York, Caterpillar shares fell 0.9 percent despite reporting solid earnings, as the market remained unconvinced about the company's outlook amid recession worries.