Wall Street gained sharply on Friday buoyed by a rebound in technology sector. Solid earnings results of some technology behemoth restored investors’ confidence on risky assets like equities despite weak economic data. All three major stock indexes ended in positive territory. For the week as a whole, these three indexes finished in green too.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 1.7% or 564.69 points to close at 34,725.47, marking its best single-day performance since Dec 6. At intraday low, the blue-chip index was down more than 350 points. Notably, 25 components of the 30-stock index ended in green while 5 in red.
The tech-heavy Nasdaq Composite finished at 13,770.57, jumping 3.1% or 417.79 points due to strong performance by large-cap technology stocks. The tech-laden index is currently under correction zone for the first time since Mar 8, 2021.
Meanwhile, the S&P 500 climbed 2.4% to end at 4,431.85, its best day since June 2020. Ten out of eleven sectors of the benchmark index closed in positive zone while one in the red. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) rallied 4.4%, 3.5% 2.9% and 2.2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 9.3% to 27.66. A total of 12.8 billion shares were traded on Friday, higher than the last 20-session average of 12.1 billion. Advancers outnumbered decliners on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 1,92-to-1 ratio favored advancing issues.
Apple Leads Wall Street’s Rebound
On Jan 27, after the closing bell technology giant Apple Inc.
AAPL
reported blockbuster results for first quarter fiscal 2022. Quarterly earnings of $2.10 per share beat the Zacks Consensus Estimate by 11.1% and increased 25% year over year.
Net sales increased 11.2% year over year to $123.95 billion, which beat the Zacks Consensus Estimate by 4.92%, marking the largest quarterly revenues for the company. Apple’s total earnings topped $30 billion for the first time in history despite supply-side constraints. Except, iPAD, all product segments of the company witnessed revenue growth despite lingering effect of pandemic. Apple expects its revenue to grow more in the ensuing second-quarter.
Consequently, shares of Apple jumped 7%. Other tech bigwigs like Microsoft Corp.
MSFT
, Meta Platform Inc.
FB
and Alphabet Inc.
GOOGL
gained 2.8%, 2.4% and 3.4%, respectively. All four stocks carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Economic Data
The Department of Commerce reported that the PCE price index jumped 5.8% year over year in December, marking its fastest pace since June 1982. The core (excluding volatile food and energy items) PCE pride index – the Fed’s favorite inflation gauge – climbed 4.9% year over year in December, reflecting the biggest monthly gain since September 1983. Month over month, the core PCE inflation rose 0.5%, in line with the consensus estimate and the growth rate of November.
In December, personal income increased by 0.3%, missing the consensus estimate of 0.5%. November’s data was revised upward from 0.4% to 0.5%. Personal spending decreased by 0.6%, in line with the consensus estimate. November’s data was revised downward from a gain of 0.6% to 0.4%. Personal savings rate increased to 7.9% in December. November’s data was revised upward from 6.9% to 7.2%.
The Department of Labor reported that employment cost index rose 1% in fourth-quarter 2021 compared with the consensus estimate of 1.2% and previous quarter’s data of 1.3%. Year over year, the index rose 4% in fourth quarter compared with 3.7% in third quarter. Wages and salaries rose 1.1% in the fourth quarter, down from 1.5% in the third quarter. Over the past 12 months, wages were up 4.5% in fourth quarter compared with 4.2% in third quarter. Benefits rose 0.9% in the fourth quarter, in line with the third quarter. Year over year, benefits were up 2.8% in fourth quarter compared with 4.2% in third quarter.
The University of Michigan reported that the final reading of U.S. consumer sentiment in January fell to a 10-year low of 67.2, missing the consensus estimate of 68.6. The preliminary data for January was 68.8.
Weekly Roundup
Wall Street witnessed extreme volatility last week with roller-coaster ride in every trading session. The Dow, the S&P 500 and the Nasdaq Composite gained 0.8%, 1.3% and 0.01%, respectively. The Dow and the S&P 500 reversed a four-week losing streak and the Nasdaq Composite terminated a five-week losing run.
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