US stocks on track for modest opening gains as Facebook buoys tech sector – MarketWatch

U.S. stock-market indexes rallied on Thursday, led by a surge in shares of Facebook Inc., following better-than-expected earnings, which helped boost the broader technology sector.

What are markets doing?

The Nasdaq Composite Index COMP, +1.54%  rose 93 points, or 1.3%, to 7,097, outperforming other benchmarks in early trade. Solid earnings from technology companies helped lift the index.

The S&P 500 SPX, +0.93%  added 18 points, or 0.7%, to 2,657, with the technology sector up 2.2%. Only industrials, financials and telecommunications shares were decisively in the red.

The Dow Jones Industrial Average DJIA, +0.97% was up 150 points, or 0.6%, to 24,230, with gains in the shares of Visa Inc. and Home Depot Inc., leading the way higher for blue chips.

What is driving the market?

Traders focused on the latest run of earnings from major tech companies, which managed to instill some confidence in the earnings season. So far this season, more than 80% S&P 500 companies have beaten forecasts, but the better-than-expected results have often failed to lift the companies’ share prices.

Meanwhile, investors appeared to push aside concerns over rapidly rising U.S. interest rates, as the yield on 10-year Treasury notes TMUBMUSD10Y, -1.11%  retreated from the psychologically important 3% level.

Some attention was focused on the prospect of the U.S. reimposing sanctions on Iran, despite French President Emmanuel Macron’s efforts at brokering a new deal between Washington and Iran. But investors remain circumspect about the possibility of fresh sanctions, analysts say.

Which stocks are in focus?

Shares of Facebook Inc. FB, +8.35%  surged by 8.5% after the social-media giant late Wednesday posted earnings that easily beat forecasts.

Advanced Micro Devices Inc. ‘s stock AMD, +14.21%  jumped 12% after the chip maker late Wednesday offered an upbeat revenue outlook and delivered higher profit than expected.

Shares of Chipotle Mexican Grill Inc.’s shares CMG, +23.04%  rallied by 20% after analysts at several investment banks raised their price targets following earnings reports on Wednesday.

Ford Motor Co.‘s stock F, +2.34% climbed 2.8% after profit and sales topped Wall Street expectations.

On a downbeat note, eBay Inc.‘s shares EBAY, -6.27%  fell over 5.9% after the online marketplace provided a downbeat outlook in its earnings out late Wednesday. Payments processor PayPal Holdings Inc.’s stock PYPL, +3.41% PYPL, +3.41% rose 4% after its results.

AT&T Inc. shares T, -6.19% fell 6.2% after missing profit and sales forecasts.

Shares of General Motors Co. GM, -2.23%  slid by 1.7% after the auto maker posted a 60% drop in net income on restructuring costs.

ConocoPhillips COP, +2.12%  profit topped estimates and shares are up 0.9%.

Read: GM earnings are likely to show a profit decline amid flagging sales and higher costs

After the market closes, Intel Corp. INTC, +2.56% Microsoft Corp. MSFT, +2.22% Amazon.com Inc. AMZN, +2.58%  and Starbucks Corp. SBUX, +2.60%  are slated to report.

See earnings previews from: Intel, Amazon, Microsoft and Starbucks.

What are strategists saying?

“This is an environment when not every stock gets a participation trophy, but only the ones that can show solid revenue growth and positive guidance,” said Karyn Cavanaugh, senior market strategist at Voya Financial.

“People are concerned about inflation, but I don’t even know what “overheating” means. There is still slack in the labor market, so I would not worry about runaway inflation and higher bonds yields right now reflect continuing growth,” Cavanaugh said.

What’s on the economic calendar?

The weekly initial jobless claims dropped 24,000 to 209,000, the lowest level since December 1969.

U.S. durable goods orders climbed 2.6% in March, largely thanks to a 44.5% surge in commercial plane orders. Separately, U.S. trade deficit in goods narrowed 10.3% to $68 billion last month.

Meanwhile, rates for home loans approached a five-year high as strong economic data and rising commodity prices drove a selloff in bonds.

The 30-year fixed-rate mortgage averaged 4.58%, according to Freddie Mac’s weekly survey, out Thursday. That marked an 11 basis point gain during the previous week, and the highest since August 2013.

The trade deficit in goods narrowed 10.3% to $68 billion, according to the government’s advanced report released Thursday.

In Europe, the European Central Bank made no changes to its statement on Thursday, leaving interest rates unchanged and repeating its promise to keep buying bonds until the end of September, or beyond, if necessary.

Read a recap of the ECB conference: Draghi to deal with weaker economic data

Check out: Here’s why the euro looks cheap ahead of Thursday’s ECB meeting

What are other markets doing?

Asia markets closed mixed, while European stocks SXXP, +0.82%  traded higher.

Oil prices CLM8, +0.25%  advanced as the White House mulls the possibility of reimposing sanctions on Iran. June West Texas Intermediate crude CLM8, +0.25%  rose 0.9%, to $68.64 a barrel.

Meanwhile gold futures GCM8, -0.31%  rose 0.1%.

The ICE U.S. Dollar Index DXY, +0.29%  was flat at 91.173.