European stock markets closed higher Tuesday to start the new trading month. The pan-European Stoxx 600 climbed 1.1% by the close, with the commodities sector leading the gains with a 3.3% gain, while almost all sectors and major bourses closed in positive territory. UBS reported a drop in quarterly profit on Tuesday, but beat analysts’ expectations and set ambitious new profitability targets as part of a strategic update.
U.S. stocks gained for a third day Tuesday as Wall Street tried to bounce back after a wild January. Bank stocks led the market higher, with Goldman Sachs and JPMorgan Chase up 2.6% and 1.7%, respectively. Wells Fargo also gained more than 3.3%. Banks got a boost when the yield on 10-year Treasury bonds rose 2 basis points and at times climbed back above 1.8%. This came after U.S. manufacturing data for January showed further signs of rising inflation.
Stocks in the Asia-Pacific region rose this morning, with several major markets in Asia closed for the New Year holiday. The Australian stock market rose sharply, extending gains from the previous session. Among major mining companies, BHP Group was up about 2%, while Mineral Resources and Rio Tinto were both up nearly 3%. Markets in mainland China, Hong Kong, Singapore and South Korea are closed Wednesday for the Lunar New Year holiday.
Alphabet posts positive fourth-quarter earnings
Google parent Alphabet reported fourth-quarter profit and revenue that beat expectations. Shares rose more than 9% in extended trading. The company also announced a 1-for-20 stock split that will take effect in July. Earnings per share (EPS) came in at $30.69 versus $27.34 expected, while revenue was expected at $75.33 billion versus $72.17 billion, according to Refinitiv. Alphabet posted revenue growth of 32%, proving once again that the company could withstand the pressures of the pandemic and inflation. The results follow a year of outperformance. The stock rose 65% last year, outperforming all other Big Tech companies and more than tripling the gains of the S&P 500. Google’s advertising revenue was $61.24 billion in the quarter, up 33% from $46.2 billion in the year-ago period.
PayPal stock plunges after weak earnings forecast
Shares of PayPal fell more than 17% in after-hours trading Tuesday after the company reported mixed results and Q1 guidance that fell short of analysts’ estimates. The company expects first-quarter non-GAAP earnings per share of 87 cents, below the $1.16 expected by analysts. PayPal forecasts full-year 2022 revenue growth of 15% to 17% on both a spot and constant currency basis. Analysts had expected revenue growth of 17.9% for 2022. PayPal CEO Dan Schulman told CNBC that the company took a “measured approach” to the forecast, but revenue should accelerate in the second half of the year.