The San Juan Daily Star
Nasdaq soars more than 3% on Meta boost, Fed relief
The Nasdaq rose to a near five-month intraday high as Meta Platforms surged on rigorous cost controls, while a dovish message from Federal Reserve Chair Jerome Powell boosted appetite for risky assets.
The Facebook parent soared 26.9% to a near eight-month high after it announced a new $40 billion share buyback and said it would cut costs in 2023 by $5 billion to between $89 billion and $95 billion.
The S&P 500 Value index housing Meta jumped 2% to more than a year’s high.
“It certainly seems that markets are up because earnings for Meta were surprisingly positive,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Seven of the top 11 S&P 500 sectors advanced, with the communication services sector, which includes Meta, jumping 6.7% to its highest in five months.
Apple Inc, Alphabet Inc and Amazon.com Inc rose between 3.2% and 6.4% ahead of their quarterly results after markets close.
Wall Street’s main indexes got a boost as Powell acknowledged that inflation was starting to ease. The U.S. central bank raised rates by 25 basis points on Wednesday.
After a bruising 2022, U.S. stocks have made a strong comeback, with megacap companies gaining on hopes that the Fed will ease its hawkish monetary policy stance.
“Investors are finally looking beyond the specter of the Federal Reserve raising rates. They see there is an eventual end to the misery of rate hikes and are realizing so many stocks were oversold in the misery of last year,” said Peter Andersen, founder of Andersen Capital Management.
Meanwhile, data showed jobless claims unexpectedly fell last week to a nine-month low, highlighting the labor market’s resilience, ahead of nonfarm payroll numbers on Friday.
At 13:23 ET, the Dow Jones Industrial Average was down 93.07 points, or 0.27%, at 33,999.89, the S&P 500 was up 61.41 points, or 1.49%, at 4,180.62, and the Nasdaq Composite was up 383.38 points, or 3.24%, at 12,199.70.
The S&P 500’s chart formed a “golden cross” pattern, in which its 50-day moving average vaulted above the 200-day moving average, perceived by many as a bullish signal for near-term momentum.
The price-weighted Dow was the only major index in the red after disappointing earnings by some of its components. Honeywell International Inc shed 0.5% after posting a 28.6% fall in quarterly profit.
Drugmaker Merck & Co slid 4.6% on a lower-than-expected annual forecast, while Eli Lilly & Co dropped 5.5% on missing quarterly revenue estimates.
Align Technology Inc surged 29.3% to a nine-month high on its first quarterly results beat in a year.
Analysts now see earnings of S&P 500 firms declining 2.4% for the quarter, according to Refinitiv estimates.
Advancing issues outnumbered decliners by a 2.74-to-1 ratio on the NYSE, and by a 3.15-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and one new low, while the Nasdaq recorded 135 new highs and nine new lows.