NEW YORK, April 20 ― The three main Wall Street benchmarks had their best days in over a month yesterday, with the Nasdaq closing up 2.2 per cent, as investors responded to positive earnings and dovish comments from two US Federal Reserve officials on interest rate rises.

Johnson & Johnson advanced 3.1 per cent to a second record close in three sessions, as the drugmaker's quarterly profit exceeded market expectations and it raised its dividend payout.

Of the first 49 companies in the S&P 500 index to report quarterly earnings, 79.6 per cent have exceeded profit estimates, as per Refinitiv data. Typically, 66 per cent beat estimates.

"It certainly feels like every earnings season, especially since March 2020, is more important than the next, but particularly given where we sit in the economic cycle, the Fed's rate hike cycle, and the elevated inflation backdrop,” said Max Grinacoff, equity derivatives strategist at BNP Paribas.

International Business Machines Corp IBM.N gained 2.4 per cent, before ticking up a further 1.8 per cent following its latest numbers report after market close.

Meanwhile, Netflix Inc closed 3.2 per cent up, before cratering 24 per cent after the bell when it reported subscriber numbers had declined for the first time in a decade. The streaming company also forecast further losses in the second quarter.

St. Louis Federal Reserve Bank President James Bullard on Monday repeated his case for increasing the rates to 3.5 per cent by the end of the year to slow a 40-year-high inflation. He also said he did not rule out a 75 basis points rate hike.

Stocks appeared to brush aside the remarks, and the main indexes rallied further in late afternoon trading after both Chicago Federal Reserve Bank President Charles Evans and Atlanta Federal Reserve Bank President Raphael Bostic offered more dovish comments.

Bond yields continued their recent moves higher though. The 30-year yield exceeded 3 per cent for the first time since April 2019, while the yield on the 10-year Treasury Inflation-Protected Securities (TIPS) turned positive for the first time since March 2020, the start of the coronavirus pandemic.

"We typically assume higher yields should be beneficial for banks, but that correlation has broken down a bit and it's been the sectors most negatively-correlated to rising rates - defensive sectors - which have actually rallied,” said BNP's Grinacoff.

The Dow Jones Industrial Average rose 499.51 points, or 1.45 per cent, to 34,911.2, the S&P 500 gained 70.52 points, or 1.61 per cent, to 4,462.21 and the Nasdaq Composite added 287.30 points, or 2.15 per cent, to 13,619.66.

The advances were the most by all three since March 16.

Ten of the 11 major S&P subsectors were higher, led by consumer discretionary stocks. Among the best performers in the index were gaming companies, with Wynn Resorts Inc, Caesars Entertainment Inc and Penn National Gaming Inc gaining between 4.9 per cent and 5.9 per cent.

Energy stocks fell 1 per cent as oil prices tumbled 5.2 per cent after the International Monetary Fund cut its growth forecasts for the global economy and warned of higher inflation.

This year's rally in crude prices, which are still up around a third despite yesterday's declines, helped Halliburton Co post an 85 per cent rise in first-quarter adjusted profit as demand for its services and equipment increased. However, the oilfield services firm's shares were 0.8 per cent lower, amid the wider slump in energy stocks.

Meanwhile, Twitter Inc declined 4.7 per cent. More private equity firms have expressed interest in participating in a deal for the micro blogging site, according to reports.

Trading volume on US exchanges was 10.53 billion shares, compared with the 11.67 billion average for the full session over the last 20 trading days.

The S&P 500 posted 35 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 70 new highs and 333 new lows. ― Reuters