May 9, 2021

S&P Hangs onto Gains by Noon

3 min read
The S&P 500 clinched a new intraday record on Thursday after blowout earnings results from...

The S&P 500 clinched a new intraday record on Thursday after blowout earnings results from two of the biggest tech companies in the world: Apple and Facebook.

The Dow Jones Industrials came off its highs of the morning, but remained buoyant 18.19 points to 33,838.57,

The S&P 500 cleared breakeven 5.61 points to 4,188.79.

The NASDAQ Composite dropped 50.86 points to 14,000.17 as traders took profits after a host of strong tech earnings. Amazon picked up 0.5% and Alphabet gained 1.5%.

Investors pointed to strong earnings results from both iPhone-maker Apple and social media platform Facebook in explaining the S&P 500’s intraday record at the open.

Stocks pared their opening gains about an hour into the session as traders took profits and wondered whether how much of the positive earnings news had already been priced into the markets.

Investors pointed to strong earnings results from both iPhone-maker Apple and social media platform Facebook in explaining Thursday’s gains.

Apple said that sales jumped 54% during the quarter, with each product category seeing double-digit growth. The company also said it would increase its dividend by 7%, and authorized $90 billion in share buybacks. Apple shares rose 0.4%.

Facebook’s revenue jumped 48%, driven by higher-priced ads, sending its stock up as much as 6.5% and to a record high. Qualcomm shares soared 4% after reporting a 52% jump in revenue.

Cruise stocks jumped after the CDC said sailings from U.S. ports could begin mid-July. Carnival sailed 0.6% and Norwegian shares jumped 2.3%.

Thursday marks President Joe Biden’s 100th day in office. On Wednesday evening, he made his first address to a joint session of Congress where he pushed his so-far popular agenda, which includes a $2 trillion infrastructure plan as well as a freshly unveiled, $1.8 trillion plan for families, children and students.

Thursday is also the busiest day of the quarterly earnings season, with roughly 11% of the S&P 500 slated to provide quarterly updates.

McDonald’s published its results before the opening bell and told investors that its sales have finally topped pre-pandemic levels. The Dow component also raised its outlook for system-wide sales growth.

Caterpillar, which also reported on Thursday, lost 2.6% while Merck dropped 5.1% following disappointing results. Amazon, Gilead Sciences, Twitter, U.S. Steel and Western Digital will post results after the market closes.

Economic data released Thursday gave investors an update on the progress of the economic recovery.

First-quarter Gross Domestic Product hit an annualized rate of 6.4%, according to a report published by the Bureau of Economic Analysis, a sign that the U.S. economy began 2021 with an acceleration of commercial activity. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003.

The U.S. Labor Department, meanwhile, reported that initial jobless claims last week totaled 553,000, just above the 528,000 estimate issued by Dow Jones.

Prices for 10-Year Treasurys slumped, raising yields to 1.66% from Tuesday’s 1.63%. Treasury prices and yields move in opposite directions.

Oil prices hung onto gains of 84 cents to $64.70 U.S. a barrel.

Gold prices handed back $6.10 to $1,767.80 U.S. an ounce.

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