Wall Street: With gains for four straight sessions, the S&P 500 recorded its largest one-day percentage gain since April.
The three primary stock indexes on Wall Street surged almost 2 percent on Thursday, bolstered by positive quarterly financial reports and expectations that the U.S. Federal Reserve may have completed its rate-hiking campaign.
The Fed held interest rates steady on Wednesday, as was expected. Chair Jerome Powell acknowledged the effects of the recent spike in bond yields on the economy, even as he left the door open to additional tightening.
Longer-dated U.S. Treasury yields fell as a result of the remarks, which were seen as signals that the central bank was done raising interest rates. This helped to support the market.
Everyone wanted to hear Powell’s remarks from yesterday’s press conference, stated Justin Burgin, vice president of equity research at Ameriprise Financial in Troy, Michigan.
Burgin also cited earnings reports that were better than anticipated. Despite the lower-than-expected guidance for the current quarter, Burgin said analysts are still projecting growth.
The fact the wheels didn’t come off the bus for the fourth quarter is pretty good, he stated.
Wall Street is projecting fourth-quarter earnings growth of 7.2%, down from 11% on October 1st, before the reporting season started, based on the most recent LSEG data. Furthermore, of the companies that have reported thus far for the third quarter, 81.9% have exceeded analyst expectations, while 14.9% have fallen short of forecasts.
The S&P 500 (.SPX) gained 79.92 points, or 1.89 percent, at 4,317.78, the Nasdaq Composite (.IXIC) gained 232.72 points, or 1.78 percent, at 13,294.19. The Dow Jones Industrial Average (.DJI) increased 564.5 points, or 1.7%, to 33,839.08.
With gains for four straight sessions, the S&P 500 recorded its largest one-day percentage gain since April. For the first time since October 24, the benchmark index also closed above its 200-day moving average.
The small-cap Russell 2000 index (.RUT) ended the day 2.7% higher, marking the largest percentage gain in one day since June 6.
The Nasdaq saw its largest one-day percentage increase since July 28 as it continued its winning streak for the fifth day in a row.
The set-up was well primed for a bit of a relief rally, according to Emily Leveille, portfolio manager at Santa Fe, New Mexico’s Thornburg Investment Management, following the October stock market meltdown.
With gains of more than 3% apiece, rate-sensitive real estate (.SPLRCR) and energy (.SPNY), the two largest S&P 500 sectors, led the increase. Consumer staples (.SPLRCS) saw a 1.3% increase, while communications services (.SPLRCL) saw the least increase, adding just 0.9%.
Starbucks (SBUX.O) saw a 9.5% increase in individual stock prices after the coffee chain’s fourth-quarter earnings exceeded forecasts. Additionally, Qualcomm’s (QCOM.O) stock increased 5.8% after the chip designer exceeded expectations for first-quarter sales and profit.
The massive payments company PayPal increased its full-year adjusted profit forecast, sending its shares up 6.6%. The shares of Apple (AAPL.O) closed higher by 2% ahead of the company’s quarterly report, which is anticipated later on Thursday.
Moderna (MRNA.O), which sold off after cutting its 2023 COVID-19 vaccine sales forecast, was one of the other major stock movers.
The number of Americans filing new claims for unemployment benefits increased somewhat last week, according to data released earlier in the day.
First up this week is the October non-farm payrolls report, which is scheduled for release on Friday.
On the NYSE, advancers outnumbered decliners by a ratio of 7.30 to 1; on Nasdaq, the ratio was 3.16 to 1. In favor of advancers.
Ten new 52-week highs and nine new lows were recorded by the S&P 500, while 40 new highs and 140 new lows were recorded by the Nasdaq Composite.
11.96 billion shares were traded on US exchanges, up from the previous 20 sessions’ average of 10.78 billion shares.
