Wall Street is surging, fueled by the technology boom

  • Baker Hughes falls after missing fourth-quarter profit estimates
  • Activist investor Elliott Management is taking a stake in Salesforce
  • Chips on track for biggest daily gain since November
  • Indexes on the rise: Dow 0.98%, S&P 1.41%, Nasdaq 2.09%,

NEW YORK, Jan 23 (Reuters) – Wall Street rallied on Monday, led by gains in technology stocks, as investors kicked off the week with big earnings on renewed enthusiasm for market-leading stocks that took a beating last year.

All three major stock indexes extended gains on Friday, gaining momentum as the day progressed. Technically the Nasdaq was ahead, boosted by a 4.9% jump in semiconductor shares (.SOKS).

“This is a remarkable rally in many names that have underperformed last year,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “No one wants to watch from the sidelines with a pile of money as the market gets away from them.”

The session marks the calm before the storm in a week packed with high-profile earnings reports and a backlog loaded with key economic data.

Investors are all but certain that the Federal Reserve will implement a significant rate hike next week, even as the U.S. central bank remains committed to taming the hottest inflationary cycle in decades.

According to CME’s FedWatch tool, financial markets have assessed a 99.8% probability of a 25 basis point increase in the Fed funds target rate at the end of next Wednesday’s two-day monetary policy meeting.

The Dow Jones Industrial Average (.DJI) rose 328.17 points, or 0.98%, to 33,703.66, the S&P 500 (.SPKS) gained 55.93 points, or 1.41%, to 4,028.54 , and the Nasdaq Composite added 4 points (.IKS2. or.). 2.09%, to 11,373.28.

All 11 major sectors in the S&P 500 were higher, led by technology (.SPLRCT), jumping 2.8%.

The fourth quarter reporting season went into overdrive, with 57 companies in the S&P 500 reporting results. Of those, 63% achieved better-than-expected earnings, according to Refinitiv.

Analysts now see fourth-quarter S&P 500 earnings overall falling 3% year over year, nearly double the 1.6% annual decline seen at the start of the year, according to Refinitiv.

This week, Microsoft Corp ( MSFT.O ) and Tesla Inc, along with a number of industry majors including Boeing CO ( BA.N ), 3M Co ( MMM.N ), Union Pacific Corp ( UNP.N ) Dov Inc. ( DOV.N ), Northrop Grumman Corp ( NOC.N ), is expected to report quarterly results.

Tesla Inc ( TSLA.O ) rose 7.8% after Chief Executive Elon Musk pleaded guilty in his fraud trial over a tweet in which he said he had support for taking the electric car maker private.

Baker Hughes Co ( BKR.O ) missed quarterly profit estimates due to inflationary pressures and continued disruption from Russia’s war on Ukraine. Shares of the oil company fell by 0.9%.

Cloud-based software firm Salesforce Inc ( CRM.N ) jumped 3.1% on news that activist investor Elliot Management Corp had taken a multibillion-dollar stake in the company.

Spotify Technologi SA ( SPOT.N ) joined a growing list of tech-related companies to announce upcoming job cuts, laying off 6% of its workforce as rising interest rates and the possibility of a recession continue to weigh on growth stocks. The music streaming company’s shares rose 2.1%.

On the economic front, the Commerce Department is expected to present its initial “advanced” look at fourth-quarter GDP on Thursday, which analysts expect will reach 2.5%.

On Friday, a broad-based personal consumption expenditures (PCE) report should shed light on consumer spending, income growth and, most importantly, inflation.

Advancing issues outnumbered declining ones on NISE by a ratio of 3.53 to 1; on the Nasdaq, a ratio of 1.95 to 1 favored the advancers.

The S&P 500 posted 11 new 52-week highs and no new lows; The Nasdaq Composite recorded 66 new highs and 14 new lows.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanjal and Johan M Cherian in Bengaluru Editing by Marguerite Choy

Our Standards: Thomson Reuters Trust Principles.

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