Wall Street’s major stock indexes posted their biggest gains in more than six weeks on Thursday, as tech companies clawed back some of the ground they had recently lost.
The Standard & Poor’s 500 index rose 2.5%, with about 85% of stocks in the benchmark closing higher. The Dow Jones industrial average climbed 1.8% and the tech-heavy Nasdaq composite finished up 3.1%.
The gains erased the indices’ weekly losses, although they are still all heading for a dismal monthly end after sliding for much of April.
This week has been particularly eventful as investors scrutinize a big batch of corporate earnings from big tech companies, industrial companies and retailers.
“Volatility is high across the board,” said Zach Hill, head of portfolio management at Horizon Investments. “We had some weakness last week and the start of this week, and we’re seeing some of that reversal.”
The S&P 500 rose 103.54 points to 4,287.50, while the Dow climbed 614.46 points to 33,916.39. The Nasdaq took 382.59 points to close at 12,871.53.
Stocks of small companies also rallied. The Russell 2000 rose 33.91 points, or 1.8%, to 1,917.94.
Big tech and communications companies have been driving much of the swings in the broader market as their expensive stock values have more strength to drive major indexes up or down.
Apple rose 4.5% in regular trading. It rose another 2.3% in after-hours trading after reporting stronger-than-expected results and increasing its dividend and stock buyback program.
Chipmaker Qualcomm jumped 9.7% after easily beating Wall Street earnings estimates. Facebook parent company Meta Platforms jumped 17.6%, the biggest rise among S&P 500 stocks, after beating Wall Street’s first-quarter earnings forecast and reporting an encouraging rise in the number of daily users.
Favorable financial reports helped support the gains of several other large companies. McDonald’s rose 2.9% after a strong earnings update. Southwest Airlines rose 2.1% after reporting strong revenue and telling investors it expects a profitable year as travel demand returns with the pandemic subsiding.
Amazon rose 4.7% in regular trading but fell 10.5% in after-hours trading after the online retail giant reported its first quarterly loss since 2015. company reported a drop in sales and a huge depreciation of its investment in an electric vehicle. Begin.
Bond yields gained ground. The yield on the 10-year Treasury fell from 2.81% to 2.83%.
The latest round of corporate report cards hits the market as Wall Street tries to figure out how rising inflation is affecting businesses and consumer spending. Earnings were mostly positive, but investors are also focusing on forecasts, which have become harder to provide for many companies due to all the uncertainties surrounding inflation and economic growth.
“Companies just don’t have enough transparency about the future to give numbers on this,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.
Supply chain issues have hampered business operations in many industries throughout the pandemic recovery, and Russia’s war on Ukraine has driven up prices for energy and key food commodities. . China’s strict COVID-19 lockdown measures have added to concerns about slowing growth.
“All of this just fuels investor anxiety, which is high,” Draho said. “Investors are just trying to make sense of everything that’s going on.”
The US Federal Reserve is expected to hike rates aggressively as it steps up its fight against inflation. The Fed chairman indicated that the central bank may raise short-term interest rates to double the usual amount in upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such hike since 2018.
The Commerce Department said Thursday that the U.S. economy contracted in the last quarter for the first time since the pandemic recession hit two years ago. But the report showed consumers and businesses continued to spend, despite rising inflation, as a sign of underlying resilience.
Consumer spending is being watched closely as an indicator of the broader economy as goods, including food, clothing and gasoline, become more expensive. Investors will get another spending update on Friday when the Commerce Department releases its personal income and spending report for March.