Stocks rise with upbeat earnings; France's 10-year bond yield hits 5% mark

By Caroline Valetkevitch and Dhara Ranasinghe

NEW YORK/LONDON, Oct 21 (Reuters) - Major stock indexes climbed on Wednesday as results and forecasts lifted sentiment about the earnings outlook, while France's 10-year bond yield hit 5% for the first time since 2002 amid concern about the outlook for the country's economy.

 Shares of SpaceX also shot up about 10% after Elon Musk said late on Tuesday that a merger of his two companies SpaceX and Tesla would be "a good idea." SpaceX also posted its first profit as a public company.

Shares in companies in Japan and Taiwan that are suppliers to Tesla  and SpaceX advanced as well. 

Super Micro shares jumped more than 9% after the AI server maker forecast quarterly revenue and profit margin above Wall Street estimates.

 Investors have been worried about the strength of the AI trade and swings in prices of government bonds ahead of the third-quarter reporting period, with AI-related shares selling off recently. 

"A lot of the concerns that we had over the last few weeks that sent the market lower are being alleviated," said Adam Sarhan, chief executive of 50 Park Investments in New York.

Earnings, he said, "are coming in mixed to stronger than expected. That's a big relief because... tech stocks fell hard last week on fears that the AI party is over." In addition, US bond yields have been falling after their recent run higher, and US interest rate hike expectations have been coming down, he said.

The yield on benchmark US 10-year notes was down 1.47 basis points at 5.102%, from 5.117% late on Tuesday.

The Dow Jones Industrial Average rose 76.77 points, or 0.15%, to 52,572.65, the S&P 500 rose 27.15 points, or 0.35%, to 7,739.72 and the Nasdaq Composite was up 226.91 points, or 0.86%, at 26,651.94.

Meta and Tesla are due to report results after the bell.

MSCI's gauge of stocks across the globe rose 3.98 points, or 0.35%, to 1,134.38.The pan-European STOXX 600 index rose 0.84%.

In Asia,  Korean stocks gained 3%, while Japan's Nikkei 225 rose almost 1%.

Shares of South Korean artificial intelligence infrastructure company Elice Group surged almost 30%, rebounding from a slump in its market debut on Tuesday.

In addition, Australian data center operator NextDC shed nearly half of its market capitalization on Wednesday after sharply cutting revenue forecasts for the year ahead and putting future developments on hold, extending the burst of negative sentiment towards global AI stocks. 

UNEASE IN FRANCE

France's bond yields rose again as investors took stock of the widespread protests across the country that have piled pressure on a government already struggling to shore up its finances.

Its 10-year bond yield hit a new 24-year high above 5%. The premium on French yields over benchmark 10-year German Bunds has also been edging back toward early October's 15-year high of nearly 160 bps.

 French supermarket operator Carrefour fell 13% after it cut its guidance due to the recent protests.

The euro was down 0.1% at $1.1226. Against the Japanese yen, the dollar weakened 0.06% to 158.06.

Investors awaited next week's Federal Reserve meeting.

Elsewhere, the Australian dollar gained after Reserve Bank of Australia Deputy Governor Andrew Hauser told a Citi conference that the inflation outlook looked "materially worse." The Aussie was last up 0.24% versus the greenback at $0.702.

Indonesia's central bank held its main interest rate unchanged on Wednesday, but raised its deposit facility rate by 25 basis points and cut banks' reserve requirement ratio by 2 percentage points to support liquidity and lending after markets were roiled by an MSCI warning last week that Indonesian stocks could be excluded from its major benchmarks. 

In the oil market, prices were mixed. US data showed a larger-than-expected draw in oil stocks.

US crude was last down 0.15% at $97.67 a barrel, while Brent rose to $109.12 per barrel, up 0.3% on the day.

(Reporting by Caroline Valetkevitch in New York and Dhara Ranasinghe in London; Additional reporting by Gregor Stuart Hunter in Singapore and Samuel Indyk; Editing by Louise Heavens, Aidan Lewis and Andrea Ricci )