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S&P 500 Posts Third Consecutive Weekly Gain Amid Better-Than-Expected Earnings, Hope for Rate Cuts; Utilities Lead Climb
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S&P 500 Posts Third Consecutive Weekly Gain Amid Better-Than-Expected Earnings, Hope for Rate Cuts; Utilities Lead Climb
May 10, 2024 2:26 PM

04:51 PM EDT, 05/10/2024 (MT Newswires) -- The Standard & Poor's 500 index rose 1.9% this week, marking its third consecutive week of gains, as earnings reports were mostly above expectations and investors grew more hopeful for rate cuts.

The market benchmark ended the week at 5,222.68. The index is now up 3.7% for the month to date and up 9.5% for the year to date.

While quarterly earnings have been largely above expectations, revenue hasn't surpassed estimates as often. Among the 64 S&P 500 components that reported this week, 79% topped earnings forecasts while just 44% had better-than-expected revenue, according to Bloomberg data. Still, only 40% of the components had revenue below expectations as 16% wee in line with Street views.

Investors have been growing more hopeful that the Federal Reserve's policy-setting committee would start cutting rates after last week's weaker-than-expected monthly jobs data. In prepared remarks on Friday, Federal Reserve Gov. Michelle Bowman said the Federal Open Market Committee should proceed cautiously with policy decisions, noting the impact of policy on financial stability.

All of the S&P 500's sectors rose this week. Utilities had the largest percentage gain, up 4%, followed by a 3.1% increase in financials and a 2.6% rise in materials. Consumer staples, industrials, real estate and communication services also rose by more than 2% each.

Gainers in utilities were led by shares of Vistra ( VST ) , which rose 15% as the electricity and power generation company reported Q1 revenue above analysts' expectations. Shares of Constellation Energy ( CEG ) climbed 10% as the company reported adjusted operating earnings in Q1 that were above expectations. Chief Executive Joseph Dominguez said the company expects to add "up to 1,000 megawatts or perhaps more of clean, firm power to the grid."

Among the financial sector's gainers, Fidelity National Information Services ( FIS ) shares rose 5.5% as the company posted Q1 adjusted earnings and revenue above analysts' mean estimates and boosted its 2024 adjusted earnings guidance.

In the materials sector, shares of International Flavors & Fragrances ( IFF ) added 12% amid its report of higher-than-expected Q1 adjusted earnings and net sales. The company also said it expects 2024 sales to trend toward the higher end of its guidance range of $10.8 billion to $11.1 billion.

Next week, investors will receive key updates on inflation with the April producer price index due on Tuesday, followed by the April consumer price index on Wednesday. Other reports next week will include April retail sales, building permits and housing starts.

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