US stocks rise for third straight day as Tesla surges

A trader works on the floor of the New York Stock Exchange. PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks shrugged off early weakness and finished higher for a third straight session on Thursday (July 21) following strong Tesla results and a pullback in the US dollar.

Tesla surged nearly 10 per cent after it reported better-than-expected profits despite a drag from lower output at a key China factory due to Covid-19 restrictions.

Meanwhile, the European Central Bank surprised markets with a bigger than expected half-point interest rate hike to combat soaring inflation, a move that lifted the euro against the dollar following a huge rally in the greenback that has dented results for some US multinationals.

Quincy Krosby, chief global strategist at LPL Financial, said market sentiment has clearly improved some, but there were still several major earnings reports in the coming days that will be critical in determining what's next for stocks.

"The question that I think hovers over the market is: Is the bear market over?," she said. "Is this the end?"

The tech-rich Nasdaq Composite Index led the major indices, jumping 1.4 per cent to finish at 12,059.61.

The Dow Jones Industrial Average gained 0.5 per cent to end the day at 32,036.90, while the broad-based S&P 500 advanced 1 per cent to 3,999.00.

Airlines were under pressure after American Airlines and United Airlines reported profits, but signalled that capacity would not reach pre-pandemic levels quickly due to personnel shortages and high costs.

American shares dropped 7.4 per cent and United sank 10.2 per cent.

Ford won 2.1 per cent as it announced a series of initiatives Thursday to strengthen its supply of batteries and raw materials needed to ramp up production of electric vehicles.

The company has signed contracts for battery cells to ensure it can boost output to 600,000 electric vehicles a year by the end of 2023.

Amazon climbed 1.5 per cent as it announced it was buying US primary health care provider One Medical for US$3.9 billion (S$5.5 billion) in a big step for the online retail giant's move into the health sector. One Medical soared nearly 70 per cent.

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