Nasdaq Soars As Meta Leads Tech Sector Rally
Stocks moved mostly higher during trading on Thursday, extending the rally seen late in the previous session. Tech stocks helped lead the advance, resulting in a substantial increase by the Nasdaq.
The tech-heavy Nasdaq soared 384.50 points or 3.3 percent to a nearly five-month closing high of 12,200.82, while the S&P 500 jumped 60.55 points or 1.5 percent to 4,179.76, it’s best closing level in over five months.
Meanwhile, the narrower Dow spent most of the day in negative territory, with the blue chip index edging down 39.02 points or 0.1 percent to 34,053.94.
The surge by the Nasdaq came as Meta Platforms (META) led a tech sector rally, with the Facebook parent skyrocketing by 23.3 percent to a nearly eight-month closing high.
The spike by Meta came after the company reported better than expected fourth quarter revenues and announced a $40 billion stock buyback.
Stocks also continued to benefit from a positive reaction to the Federal Reserve’s interest rate announcement on Wednesday, with traders expressing optimism the Fed is nearing the end of its rate hiking cycle.
At the same time, the Dow bucked the uptrend due partly to a notable decline by shares of Merck (MRK), which tumbled by 3.3 percent after the drug giant provided disappointing guidance.
Traders were also looking ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.
Economists currently expected employment to increase by 185,000 jobs in January after jumping by 223,000 jobs in December, while the unemployment rate is expected to inch up to 3.6 percent from 3.5 percent.
A day ahead of the monthly report, the Labor Department released a report unexpectedly showing another modest decrease by first-time claims for U.S. unemployment benefits in the week ended January 28th.
The report said initial jobless claims edged down to 183,000, a decrease of 3,000 from the previous week’s unrevised level of 186,000. The dip surprised economists, who had expected jobless claims to climb to 200,000.
Jobless claims declined for the fourth time in five weeks, falling to their lowest level since hitting 181,000 in the week ended April 23, 2022.
A separate report released by the Labor Department showed U.S. labor productivity surged by more than expected in the fourth quarter of 2022.
Airline stocks moved sharply higher on the day, with the NYSE Arca Airline Index soaring by 5.7 percent to its best closing level in almost eight months.
Substantial strength was also visible among software stocks, as reflected by the 3.8 percent spike by the Dow Jones U.S. Software Index. With the jump, the index reached a five-month closing high.
Housing stocks also saw significant strength on the day, resulting in a 3.3 percent surge by the Philadelphia Housing Sector Index. The index ended the session at its best closing level in a year.
Retail, computer hardware and semiconductor stocks also showed strong moves to the upside, while energy and gold stocks bucked the uptrend.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index edged up by 0.2 percent, while South Korea’s Kospi climbed by 0.7 percent.
The major European markets also moved to the upside on the day. While the German DAX Index surged by 2.2 percent, the French CAC 40 Index jumped by 1.3 percent and the U.K.’s FTSE 100 Index advanced by 0.8 percent.
In the bond market, treasuries pulled back near the unchanged line after initially extending yesterday’s late-day rally. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.396 percent.
While the monthly jobs report is likely to be in the spotlight on Friday, traders are also likely to keep an eye on a report on service sector activity.
Earnings news will also continue to attract attention, with Alphabet (GOOGL), Amazon (AMZN) and Apple (AAPL) among the companies releasing their quarterly results after the close of today’s trading.
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