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  • Writer's pictureThe San Juan Daily Star

Wall St rebounds from Fed-driven selloff; big tech earnings in view

The KBW Regional Banking index fell 2.1%, weighed down by the 8.9% drop in New York Community Bancorp’s shares after the company reported pain in its commercial real estate portfolio, sparking renewed fears over the health of U.S. regional lenders.


Fourth quarter reporting season is going full-bore, with 208 of the companies in the S&P 500 having reported. Of those, 80% have delivered consensus-beating earnings, according to LSEG.


Analysts now expect aggregate S&P 500 earnings growth of 6.4% year-on-year for the October-December period, an improvement over the 4.7% growth seen on Jan. 1, per LSEG.


A raft of economic data showed rising productivity helping to cap labor costs, while an increase in announced layoffs and weekly jobless claims provided further evidence of softening in the labor market, which is viewed by the Fed as a precondition to assuring a sustainable downward path for inflation.


“We see these data, on the eve of the labor report tomorrow, as consistent with a healthy but moderating labor market,” Northey added. “(These reports) are consistent with our view of the economic path for 2024; that it will continue to grow, but at a slower pace.”


The S&P 500 climbed 0.94% to end the session at 4,891.21 points. The Nasdaq gained 1.04% to 15,321.61 points, while Dow Jones Industrial Average rose 0.74% to 38,434.29 points.


Of the 11 S&P 500 sector indexes, nine rose, led by consumer staples, up 1.59%, followed by a 1.42% gain in materials.


Merck advanced 4.2% after the drug maker’s upbeat fourth-quarter results.


Qualcomm fell 4.6% on concerns over Android sales in China.


Honeywell was off 3.1% after the diversified industrial conglomerate provided a disappointing first-quarter results.


Advancing issues outnumbered falling ones within the S&P 500 by a 3.3-to-one ratio.


The S&P 500 posted 28 new highs and 5 new lows; the Nasdaq recorded 61 new highs and 103 new lows.


The KBW Regional Banking index fell 2.1%, weighed down by the 8.9% drop in New York Community Bancorp’s shares after the company reported pain in its commercial real estate portfolio, sparking renewed fears over the health of U.S. regional lenders.


Fourth quarter reporting season is going full-bore, with 208 of the companies in the S&P 500 having reported. Of those, 80% have delivered consensus-beating earnings, according to LSEG.


Analysts now expect aggregate S&P 500 earnings growth of 6.4% year-on-year for the October-December period, an improvement over the 4.7% growth seen on Jan. 1, per LSEG.


A raft of economic data showed rising productivity helping to cap labor costs, while an increase in announced layoffs and weekly jobless claims provided further evidence of softening in the labor market, which is viewed by the Fed as a precondition to assuring a sustainable downward path for inflation.


“We see these data, on the eve of the labor report tomorrow, as consistent with a healthy but moderating labor market,” Northey added. “(These reports) are consistent with our view of the economic path for 2024; that it will continue to grow, but at a slower pace.”


The S&P 500 climbed 0.94% to end the session at 4,891.21 points. The Nasdaq gained 1.04% to 15,321.61 points, while Dow Jones Industrial Average rose 0.74% to 38,434.29 points.


Of the 11 S&P 500 sector indexes, nine rose, led by consumer staples, up 1.59%, followed by a 1.42% gain in materials.


Merck advanced 4.2% after the drug maker’s upbeat fourth-quarter results.


Qualcomm fell 4.6% on concerns over Android sales in China.


Honeywell was off 3.1% after the diversified industrial conglomerate provided a disappointing first-quarter results.


Advancing issues outnumbered falling ones within the S&P 500 by a 3.3-to-one ratio.


The S&P 500 posted 28 new highs and 5 new lows; the Nasdaq recorded 61 new highs and 103 new lows.


Wall Street’s main indexes gained on Thursday after data reflecting strong economic performance in the fourth quarter boosted hopes of a soft landing, while Tesla’s growth warning kept a lid on investor enthusiasm.


The economy grew much faster than expected at 3.3% in the quarter on strong consumer spending, defying dire predictions of a recession in 2023 after the Federal Reserve aggressively raised interest rates, according to the Commerce Department’s advance report.


“It is supporting that sort of Goldilocks narrative with growth looking pretty strong and the general feeling that inflation is still trending down,” said Chhad Aul, chief investment officer and head of multi-asset solutions at SLGI Asset Management.


Another data showed initial jobless claims for the week ended Jan. 20 rose to 214,000, higher than the estimated 200,000 figure.


At 11:33 a.m. ET, the Dow Jones Industrial Average was up 102.50 points, or 0.27%, at 37,908.89, the S&P 500 was up 22.93 points, or 0.47%, at 4,891.48, and the Nasdaq Composite was up 92.65 points, or 0.60%, at 15,574.57.


However, Tesla skidded 10.5% to an eight-month low and was on track to lose about $50 billion in value after warning of a sharp slowdown in sales growth this year.


The consumer discretionary sector fell 0.9% to a one-week low.


EV makers Rivian Automotive and Lucid Group also fell 3.3% and 8.0%, respectively.


Tesla’s growth warning could fan worries over the rich valuations of heavily weighted megacap companies - also known as the “Magnificent 7” - that have been the key driver of a Wall Street rally since late 2023.


“The rest of the megacap space is still screaming ahead so far this year, so even when one of the ‘Magnificent 7’ is under some pressure, you still have the rest of the group supporting the broader market,” Aul added.


The benchmark S&P 500 closed at a record level for a fourth straight session on Wednesday, after hitting an intraday all-time high for the third time in less than a week.


Humana sank 12.6% as it became the latest health insurer to forecast disappointing annual profit, dragging the S&P 500 healthcare sector down by 0.9%, the worst hit among the S&P 500 sectors.


Dow-Jones component UnitedHealth shed 5.6% and Cigna lost 3.9%.


IBM jumped 12.7% after forecasting full-year revenue growth above estimates, while Comcast added 3.8% as the media giant topped quarterly revenue estimates.


American Airlines flew 8.5% as the carrier forecast largely upbeat annual profit.


Earnings beat have been scaling down since the season’s start, but remains above the long-term average of 67%. Of the S&P 500 companies that have reported earnings so far, 82% have surpassed expectations, LSEG data showed.


Among other big movers, Boeing fell 6.5% after the U.S. Federal Aviation Administration barred the troubled planemaker from expanding production of its 737 MAX narrowbody planes.


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