Stocks extend rally, boosted by solid corporate earnings

Around 12:30 p.m., the Dow Jones industrial average was up nearly 250 points or 0.7 percent, building off Tuesday’s gains. The S&P 500 index advanced more than 1.2 percent, while the Nasdaq was on pace for a second day of gains as investors snapped up tech stocks. Despite the recent climb, all three indexes are down year to date, according to MarketWatch.

“Upward momentum continues to build,” Ivan Feinseth, chief investment officer at Tigress Financial Partners, said Wednesday in comments emailed to The Post. “Stocks look to have found firm footing after January’s selloff as the ongoing cadence of net positive corporate results continue to lift stocks, and the market is becoming more comfortable with the Fed’s hawkish monetary policy pivot.”

Still, largely positive results have generated mixed market reactions, Feinseth noted. Last year’s record-breaking profits were buffeted by easy comparisons to 2020, when the first shock from the pandemic hit markets. Achieving the same growth in the current landscape — amid widespread labor shortages, the highest inflation in decades, snarled supply chains and the ongoing pandemic — will be much more challenging.

CVS Health and Lyft both saw their shares decline despite earnings beats Tuesday. Chipotle climbed 9 percent Wednesday after it beat expectations and said it would raise prices. The Walt Disney Co. and Uber Technologies are scheduled to report after U.S. markets close.

In Asia, markets closed positive across the board, led by Hong Kong’s Hang Seng Index, which added 2 percent. European markets also traded higher, with the benchmark Stoxx 600 index advancing about 1.7 percent.

Inflationary concerns remain center stage, with investors awaiting data on consumer prices and consumer sentiment later this week to see how the highest inflation in decades is weighing on American households. A move to raise interest rates by the Fed could ease some pain but could also limit economic activity, which often hits stocks — particularly highflying companies — hard.

“Even with the January inflation numbers expected to be high, we probably haven’t seen peak inflation yet when factoring all the increasing commodity prices, service prices, and wage gains from existing and new jobs created,” Louis Navellier, chairman of Navellier & Associates, said Tuesday in comments emailed to The Post. “Higher prices in a consumer-based economy translate to less purchasing power and more insecurity about whether employment income is sufficient.”

Employers are struggling to attract and retain workers amid the present labor crunch, with nearly 11 million unfilled positions across the country at the end of December according to recent data from the Bureau of Labor Statistics. Many have raised wages to become more competitive, but surging inflation has canceled out gains for many workers: although average hourly wages rose 4.7 percent last year, overall wages fell 2.4 percent on average for all workers, when adjusted for inflation, according to the Labor Department.

Declining Treasury yields added fuel to the rally’s fire, with the yield on the 10-year U.S. Treasury note edging down to 1.935 percent, coming off its highest level since November 2019. Stocks, such as those in the tech sector, tend to benefit from lower rates as some investors look past higher upfront costs to the likelihood of hefty profits down the line.

“Many investors remain optimistic about the economy going forward, and that even if we have a hot inflation report, appetite for US stocks will still be strong. ”Ed Moya, a senior analyst with OANDA, said Wednesday in comments emailed to The Post.