ASX edges up amid modest Wall Street gains; Alphabet shines

By Jessica Yun

The Australian sharemarket lifted slightly at the open after Wall Street eked out some modest gains off the back of more US companies reporting fatter profits than expected, though giants Alphabet and Microsoft released contrasting results after the closing bell.

The S&P/ASX200 rose 0.1 per cent or just 6 points higher to 7,345.7 points at 10:20am AEST, with materials stocks doing much of the heavy lifting.

Wall Street is up again.
Wall Street is up again.Credit: Bloomberg

Champion Iron is in the lead, up 3.7 per cent, followed by Beach Energy and Altium Limited, which gained 3.4 per cent and 2.1 per cent respectively. On the other end of the bourse is Core Lithium, which is down 3.6 per cent, Qantas (down 2.9 per cent) and Lake Resources (down 2.1 per cent).

Overnight, the S&P 500 rose 0.3 per cent to its highest close since early April 2022. The Dow Jones gained 0.1 per cent and the Nasdaq composite climbed by 0.6 per cent. The ASX added 0.5 per cent on Tuesday.

Google snapped out of an unprecedented advertising slump during its latest quarter, signalling a return to growth cycle needed to fuel investments in artificial intelligence technology that expected to reshape the competitive landscape.

The company posted a profit of $US18.4 billion ($27.1 billion), or $US1.44 per share, a 15 per cent increase from the same time last year. It’s parent company Alphabet’s stock price surged nearly 8 per cent in after-hours trading after the results came out.

Microsoft reported tepid fourth-quarter sales growth, held back by decelerating demand for cloud-computing services while the software maker waits for a revenue boost from new artificial intelligence-powered products.

Shares were 1.5 per cent lower in after-hours trading.


General Electric helped lead the market with a 6.3 per cent rally after it reported stronger profit for the latest quarter than analysts expected. It also raised its forecasts for full-year revenue and profits.

Shares in Google’s parent Alphabet jumped in after-hours trading.
Shares in Google’s parent Alphabet jumped in after-hours trading. Credit: Bloomberg

Snap projected revenue in the current quarter at the lower end of analysts’ estimates, signalling that improvements to the digital advertising business are taking longer than expected to pay off. The shares fell 19 per cent in extended trading.

This week is a busy one for earnings reports, and roughly 30 per cent of the companies in the S&P 500 are on the schedule. The majority have been topping analysts’ expectations so far this reporting season, as is usually the case.

This week’s other highlight for Wall Street also got underway Tuesday: the Federal Reserve’s latest meeting on interest rates.

The wide expectation is for the Fed on Wednesday to announce another increase to interest rates, as it tries to wrestle high inflation under control. That would take the federal funds rate to a range of 5.25 per cent to 5.50 per cent, its highest level in two decades and up from virtually zero early last year.

A report on Tuesday showed confidence among US consumers rose by more than economists expected.

But many on Wall Street warn the Fed is unlikely to give any signals on Wednesday that it’s done raising rates. Inflation is still high, even if it’s moderated somewhat, and the economy may have to “yield to a long but shallow recession if the Fed is to return inflation to its 2 per cent target,” according to Steven Ricchiuto, US chief economist at Mizuho Securities.

In the bond market, yields were relatively steady for Treasurys.

The 10-year Treasury yield was holding at 3.88 per cent. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on the market’s expectations for Fed action, slipped to 4.88 per cent from 4.92 per cent.

With AP

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