The S&P 500 and Nasdaq Composite rose Monday, boosted by investor enthusiasm over a busy earnings week that many hope will give clues about how companies are dealing with inflation and supply-chain issues.
The broad benchmark index ticked up 15.09 points, or 0.3%, to 4486.46, notching its fourth consecutive session of gains. The technology-heavy Nasdaq Composite gained 124.47 points, or 0.8%, to end at 15021.81. The Dow Jones Industrial Average, in contrast, lost 36.15 points, or 0.1%, to finish at 35258.61.
The U.S. stock market has been on a bumpy ride for the past month and a half, dogged by concerns about inflation and slowing growth. Investors have been digesting the possibility that inflationary pressures could last longer than expected as supply-chain bottlenecks and labor shortages continue to flare. Signs of slowing economic growth in the U.S. and abroad also have added to concerns.
A strong start to third-quarter earnings season, however, has alleviated some of the uneasiness among investors in recent days. About 81% of S&P 500 companies that have reported so far have beat earnings-per-share expectations, according to FactSet data through Monday morning.
“Many of the companies we are looking at are citing very strong demand, and we can work with a situation where demand is strong and supply is problematic because eventually we will work through supply problems,” said Christopher Harvey, head of equity strategy at Wells Fargo Securities. “We’re trying to ascertain if we’ve had a peak in supply-chain issues… [and whether] this might be as bad as it gets.”
On Monday, supermarket chain Albertsons reported higher sales, with executives saying consumers are still spending heavily on groceries. The Boise, Idaho-based company is passing on some price increases to customers but said that it is offering cheaper alternatives. Its shares rose 95 cents, or 3.3%, to end at $29.51.
This week, investors will receive earnings results from a range of companies, including Procter & Gamble, Netflix and American Airlines. Strategists and money managers say they will be closely watching to see which companies have a better handle on wide-ranging issues, including supply-chain disruptions and rising energy prices. Investors will also parse new data on the housing market.
Data released Monday by the Federal Reserve showed that U.S. industrial production—a measure of factory, mining and utility output—pulled back in September, falling 1.3% compared with the previous month. Economists surveyed by The Wall Street Journal had expected a 0.2% increase. September’s decline was the sharpest since February. Monday’s report cited supply-chain disruptions in the auto industry and the lingering effects of Hurricane Ida as reasons for the decline.
New data Monday also showed China’s economy grew 4.9% in the third quarter from a year prior, a sharp slowdown from the second quarter’s 7.9%. The deceleration reflected several factors, including a crackdown on the technology, private-education and real-estate sectors; power shortages; and disruptions to the supply chain.
The weaker growth data are “a reminder that China is expected to lose some of its momentum, but also how these global issues like the energy crisis and supply chain issues will filter through to global growth,” said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald. “There’s just a bit of rebasing of expectations for China and the rest of the world.”
In the U.S. market, technology stocks performed well Monday. Tesla, which reports earnings this week, added $27.08, or 3.2%, to finish at $870.11. Facebook gained $10.58, or 3.3%, to close at $335.34. Twitter advanced $2.07, or 3.3%, to $64.84.
Shares of utility companies, in contrast pulled back, with the sector posting the worst performance of the S&P 500’s 11 groups. Consolidated Edison lost $1.58, or 2.1%, to close at $72.89.
Meanwhile, Zillow Group ‘s Class C shares lost $8.97, or about 9.5%, to finish at $86 after the real-estate company said it will stop buying and flipping new houses for the remainder of this year.
In energy markets, Brent crude futures, the benchmark in global oil markets, ticked down 0.6% to $84.33 a barrel. Last week, Brent crude notched its eighth consecutive week of gains—its longest such streak since a 10-week period through April 30, 1999.
Bitcoin, the world’s largest cryptocurrency by market value, gained 3.3% from its 5 p.m. ET level Sunday to trade at $61,445.09 at 5 p.m. ET, according to CoinDesk. The U.S.’s first bitcoin exchange-traded fund is expected to start trading Tuesday.
In bond markets, the yield on the 10-year Treasury note ticked up to 1.583% Monday, from 1.574% Friday. Yields rise when prices fall.
Overseas, the pan-continental Stoxx Europe 600 fell 0.5%.
Major indexes in Asia finished mixed. China’s Shanghai Composite was down 0.1%. Hong Kong’s Hang Seng rose 0.3%.
Data out Monday showed China’s economy grew 4.9% in the third quarter from a year prior.
Photo: THOMAS PETER/REUTERS
—Frances Yoon and Anna Hirtenstein contributed to this article.Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
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