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Asian shares' rise broadly cheered by US earnings, rally

South Korea Financial Markets
Currency traders watch computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Friday, May 27, 2022. Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher. (AP Photo/Lee Jin-man)
South Korea Financial Markets
A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Friday, May 27, 2022. Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher. (AP Photo/Lee Jin-man)
South Korea Financial Markets
A currency trader walks by the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Friday, May 27, 2022. Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher. (AP Photo/Lee Jin-man)
South Korea Financial Markets
A currency trader watches computer monitors at a foreign exchange dealing room in Seoul, South Korea, Friday, May 27, 2022. Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher. (AP Photo/Lee Jin-man)

TOKYO (AP) — Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher.

Benchmarks were rising in early trading across the region, including Japan, China, Australia and South Korea.

“Improved risk sentiments in Wall Street, along with earnings outperformance from Alibaba and Baidu, may aid to fuel some upside for the Asia region into today’s session,” said Yeap Jun Rong, market strategist at IG in Singapore.

Shares of Alibaba and Baidu have surged after they reported better than expected results, easing some concerns about the negative impact from restrictions to curb COVID-19 infections. Both shares continued to rise in early trading.

Gauging Japan's economic path will be on investors' minds as data on manufacturing, housing and employment for April are set to be released next week. Some analysts expect the numbers to be dim because of a slowdown in exports to China during that period.

But some optimism is also in the air, with Tokyo's restrictions on tourists easing and the daily cap raising from 10,000 incoming people to 20,000 starting June 1. The Japanese government, led by Prime Minister Fumio Kishida, is also set to push ahead in parliamentary discussions with a supplementary budget, another possible plus for investors.

Japan's benchmark Nikkei 225 added 0.8% in early trading to 26,811.06. Australia's S&P/ASX 200 gained 0.9% to 7,167.70. South Korea's Kospi jumped 1.0% to 2,638.92. Hong Kong's Hang Seng surged 2.8% to 20,687.39, while the Shanghai Composite edged up 0.6% to 3,141.15.

Wall Street ended broadly higher after seven straight weeks of declines, the longest such stretch since 2001.

Bond yields rose. The yield on the 10-year Treasury, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.

Roughly 90% of the stocks in the S&P 500 rose, with technology companies, banks and retailers driving much of the rally. While trading has remained choppy this week, the market has mostly pushed higher, unlike the past five weeks, when the S&P 500 had a pullback of 2% or more at least one day each week.

“It’s nice to see a couple days in the green, and this might actually end up being the first week when we don’t have a humongous down day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn't declare premature victory and assume we’re in the clear.”

The S&P 500 rose 79.11 points, or 2%, to 4,057.84. The Dow added 516.91 points, or 1.6%, to 32,637.19, and the Nasdaq rose 305.91 points, or 2.7%, to 11,740.65. The Russell 2000 index of smaller companies climbed 39.07 points, or 2.2%, to 1,838.24.

Retailers led the broader market higher Thursday. Macy's surged 19.3% after it raised its profit forecast for the year following a strong first-quarter financial report. Dollar General vaulted 13.7% and Dollar Tree jumped 21.9% for the biggest gain in the S&P 500 after the discount retailers reported solid earnings and gave investors encouraging forecasts.

The retail sector is being closely watched by investors looking for more details on just how much pain inflation is inflicting on companies and consumers. Weak reports from the several big companies last week, including Target and Walmart, spooked an already volatile market.

“We’re not convinced that we’re completely out of the woods here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There were a lot of negative reports last week and what those companies have talked about is what is going on through the economy."

Inflation is at a four-decade high and businesses have been raising prices on everything from food to clothing to offset higher costs. The impact from Russia’s invasion of Ukraine worsened inflation pressures by fueling higher energy and key food commodity costs. Supply chain problems worsened in the wake of China’s lockdown for several major cities as it tried to contain COVID-19 cases.

Consumers have been resilient about spending, but the pressure from inflation remains persistent and could be prompting a pullback or shift in spending from more expensive things to necessities.

The broad gains on Thursday followed a late push for markets on Wednesday prompted by details from the Federal Reserve’s latest meeting, which confirmed expectations of more interest rate hikes.

Technology stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their lofty stock values, tend to push the market harder up or down.

Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue rose 3.4%.

In energy trading, U.S. benchmark crude added 36 cents to $114.45 a barrel. U.S. crude oil prices rose 3.4% Thursday, and are up more than 55% for the year. Brent crude, the international standard, rose 45 cents to $117.85 a barrel.

In currency trading, the U.S. dollar inched down to 126.79 Japanese yen from 127.10 yen. The euro cost $1.0763, up from $1.0733.

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AP business writers Damian J. Troise and Alex Veiga contributed.

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