Philip Morris International rallied 8.8 per cent after likewise topping forecasts for both profit and revenue. CEO Jacek Olczak said the company is seeing momentum across regions and business lines, including growth for both its smoke-free business and for its combustible cigarettes.
Norfolk Southern rose 4.8 per cent after the railroad topped analysts’ forecasts for profit.
Stocks have generally slowed their record-breaking momentum this week under increasing pressure from rising Treasury yields in the bond market.
The yield on the 10-year Treasury held steady at 4.20 per cent from late Monday. But, it’s still well above the 4.08 per cent level it was at just on Friday. Higher yields for Treasurys can make investors less willing to pay high prices for stocks, which critics say already look too expensive.
Treasury yields have been climbing following a raft of reports showing the US economy remains stronger than expected. That’s good news for Wall Street, because it bolsters hopes that the economy can escape from the worst inflation in generations without the painful recession that many had believed to be inevitable.
But it also is forcing traders on Wall Street to ratchet back their expectations for how much the Federal Reserve will cut interest rates. The central bank has made the drastic shift to lowering interest rates in hopes of keeping the economy strong, but a more resilient-than-expected economy wouldn’t need as many cuts.
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Traders are now largely expecting the Fed to cut its main interest rate by half a percentage point more through the end of the year, according to data from CME Group. A month ago, some of those same traders were betting on the federal funds rate ending the year as much as half a percentage point lower than that.
In stock markets abroad, European indexes were mixed after German software giant SAP rose after nudging past profit expectations. In Asia, Japan’s Nikkei 225 dropped 1.4 per cent, and South Korea’s Kospi fell 1.3 per cent, but indexes were more resilient in China.
AP
