Stocks rose on Thursday as shares of major tech companies advanced ahead of their quarterly earnings reports. Sentiment also got a lift from better-than-expected economic data.
The Dow Jones Industrial Average traded 300 points higher, or 1%. The S&P 500 climbed 1.7% and the Nasdaq Composite advanced 2.1%.
Shares of Amazon and Apple were up by 1.2% and 3.5%, respectively. Alphabet traded 3% higher and Facebook popped 5.4%. All four companies are slated to report earnings after the bell Thursday. Four of the 11 S&P 500 sectors traded more than 2% higher, including tech and communication services.
More than 270 S&P 500 companies have reported calendar third-quarter earnings thus far. Of those companies, 85% have reported better-than-expected earnings, according to The Earnings Scout. Despite the high beat rate, several companies have seen their stocks fall after releasing their quarterly results.
Bob Doll, chief equity strategist at Nuveen, said on “Closing Bell” that the failure for a stronger-than-expected first half of earnings season to boost the broader market was a cause for concern.
“Another thing that bothers me is a lot of companies are coming out with much less-worse earnings than expected, the stocks initially go up and then they fade. Too many stocks falling on good earnings results. The market’s just tired and needs a rest,” Doll said.
Better-than-expected GDP, jobless claims data
U.S. gross domestic product for the third quarter expanded at a 33.1% annualized pace, its fastest growth ever. The reading came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones.
“Overall, the initial recovery in GDP after the first wave of lockdowns were lifted was stronger than we originally anticipated,” said Paul Ashworth, chief U.S. economist at Capital Economics. “But, with coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower.”
Meanwhile, the number of first-time unemployment-benefits filers declined for a second straight week and hit its lowest level since March. Initial weekly U.S. jobless claims came in at 751,000 for the week ending Oct. 24, better than a Dow Jones estimate of 778,000.
Thursday’s moves came a day after the market’s biggest sell-off in months. Both the Dow and S&P 500 had their worst day on Wednesday since June. The Nasdaq had its biggest one-day drop since Sept. 8.
The sell-off mirrored a rough day for European markets, as rising Covid cases on that continent spurred leaders of Germany and France to announce new lockdown restrictions for the next month. Average daily Covid-19 cases in the U.S. set another all-time high on Wednesday, marking the fourth consecutive day the nation topped its prior day record.
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