U.S. stocks are trading higher as the Street is reacting positively to softer-than-expected earnings results from some key companies. As Q2 earnings season heats up, Dow members Microsoft and Boeing, along with Google parent Alphabet are gaining ground even as their results came in below estimates. However, Texas Instruments, Chipotle Mexican Grill, and Dow component Visa all reported quarterly results that exceeded estimates. Meanwhile, the markets are rising even as the Fed is expected to raise its benchmark interest rate by 75 basis points for the second-straight meeting this afternoon. The economic calendar had some positive data points, with preliminary durable goods orders rising more than expected, the advance goods trade deficit narrowing more than projected, and wholesale inventories topping forecasts. However, mortgage applications fell for a fourth-straight week, and pending home sales fell by the largest amount since the start of the pandemic. Treasuries are subdued ahead of the Fed's decision and the U.S. dollar is ticking higher. Crude oil is trading higher and gold prices are trading to the downside. Asia finished mixed and Europe was mostly higher despite some lackluster earnings results.
At 12:46 pm ET, the Dow Jones Industrial Average is up 0.4%, the S&P 500 Index is rising 1.4%, and the Nasdaq Composite is gaining 2.5%. WTI crude oil is advancing $2.35 to $97.33 per barrel, and Brent crude oil is increasing $1.69 at $101.15 per barrel. The gold spot price is decreasing $0.10 to $1,717.60 per ounce, and the Dollar Index is ticking 0.2% higher to 107.39.
Dow member Microsoft Corporation (MSFT $264) reported fiscal Q4 earnings-per-share (EPS) of $2.23, below the $2.29 FactSet estimate, with revenues rising 12.0% year-over-year (y/y) to $51.9 billion, south of the Street's forecast of $52.4 billion. The company said in a dynamic environment it saw strong demand, took market share, and increased customer commitment to its cloud platform. However, an unfavorable foreign exchange rate movement, extended production shutdowns in China, reductions in advertising spend, the ongoing war in Ukraine, and employee expenses weighed on its results. Shares continue to rise as the company's guidance seems to be better than feared.
Alphabet Inc. (GOOGL $112), the parent of Google, posted Q2 EPS of $1.21, below the expected $1.27, as revenues grew 13.0% y/y to $69.7 billion, missing the $69.8 billion estimate. Traffic acquisition costs (TAC) came in below forecasts, and it said search and cloud revenues drove its Q2 results, but its YouTube ad revenue was below projections. GOOGL is trading higher as the Street seems to be cheering its search results.
Dow component Boeing Company (BA $156) reported an adjusted Q2 loss of $0.37 per share, larger than the $0.13 per share shortfall that was expected, with revenues declining 2.0% y/y to $16.7 billion, south of the forecasted $17.6 billion. The company said its results were driven by lower defense volume and unfavorable performance, partially offset by higher commercial volume. BA said, "We made important progress across key programs in Q2 and are building momentum in our turnaround...As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022. While we are making meaningful progress, we have more work ahead." BA is trading slightly lower.