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Tags: financial markets

Wall Street Ends Higher; Earnings, Jobs Report in Focus

Wall Street Ends Higher; Earnings, Jobs Report in Focus
TV screens at the New York Stock Exchange show the news conference of Federal Reserve Chair Jerome Powell, Jan. 31, 2024. The Fed kept its key rate unchanged at about 5.4%, a 22-year high, and signaled a policy shift by dropping previous wording that had said it was still considering further rate hikes. (Richard Drew/AP)

Thursday, 01 February 2024 04:08 PM EST

U.S. stocks rebounded Thursday as investors looked to a spate of high-profile earnings and the Friday's employment report the day after the Federal Reserve quashed lingering bets that interest rate cuts could begin as early as March.

While a broad rally sent all three major U.S. stock indexes sharply higher, the tech-laden Nasdaq advanced the most, with results from Apple Inc, Amazon.com and Meta Platforms due shortly.

"There’s further digestion of the Fed," said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. "It’s still a growth market and yesterday's sell-off was an overreaction. So today we’re getting a rally."

Apple's iPhone sales are expected to have seen the best growth in five quarters, and investors will gauge the results of Amazon.com's logistics overhaul and the fee revenue from its "Buy With Prime" service.

Meta Platforms' advertising business is likely to show a muted effect from generative AI on its advertising business.

On Wednesday, the Federal Open Markets Committee (FOMC) left its policy rate unchanged as expected. At his press conference, Fed Chair Jerome Powell called a March rate cut "unlikely," resetting market expectations of a dovish Fed pivot in the first quarter, and prompting a steep sell-off.

The KBW Regional Banking index sold off for a second straight session, weighed down by New York Community Bancorp's shares after the company reported pain in its commercial real estate portfolio, sparking renewed fears over the health of U.S. regional lenders.

Fourth quarter reporting season is going full-bore, with 208 of the companies in the S&P 500 having reported. Of those, 80% have delivered consensus-beating earnings, according to LSEG.

Analysts now expect aggregate S&P 500 earnings growth of 6.4% year-on-year for the October-December period, an improvement over the 4.7% growth seen on Jan. 1, per LSEG.

A raft of economic data showed rising productivity helping to cap labor costs, while an increase in announced layoffs and weekly jobless claims provided further evidence of softening in the labor market, which is viewed by the Fed as a precondition to assuring a sustainable downward path for inflation.

"We see these data, on the eve of the labor report tomorrow, as consistent with a healthy but moderating labor market," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Billings, Montana. "(These reports) are consistent with our view of the economic path for 2024; that it will continue to grow, but at a slower pace."

According to preliminary data, the S&P 500 gained 60.66 points, or 1.25%, to end at 4,905.95 points, while the Nasdaq Composite gained 197.63 points, or 1.30%, to 15,361.64. The Dow Jones Industrial Average rose 368.55 points, or 0.97%, to 38,518.85.

Merck advanced after the drug maker's upbeat fourth-quarter results.

Qualcomm fell on concerns over Android sales in China.

Honeywell slid after the diversified industrial conglomerate provided disappointing first-quarter guidance.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
U.S. stocks rebounded Thursday as investors looked to a spate of high-profile earnings and the Friday's employment report the day after the Federal Reserve quashed lingering bets that interest rate cuts could begin as early as March.
financial markets
471
2024-08-01
Thursday, 01 February 2024 04:08 PM
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