Dow Jumps 150 Points: Stocks Rally To New Highs After ‘Phenomenal’ Big-Tech Earnings

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Topline

Boosted by a crop of big-tech earnings that shattered Wall Street expectations, stocks are once again hitting highs Thursday as a slew of new economic data shows that the long-awaited economic recovery is picking up steam.

Key Facts

Shortly after the market opened, the S&P 500 climbed 0.8%, crossing 4,200 points for the first time ever, while the tech-heavy Nasdaq, which closed at a new high Monday for the first time in two months, also extended its record, jumping 0.8%.

Despite its recently tepid performance—due largely to underperforming stocks like Boeing and Amgen—the Dow Jones Industrial Average also moved higher, jumping 148 points, or 0.4%, to land about 0.5% below a record high from earlier this month.

Heading up gains in the S&P, shares of Facebook are soaring more than 7% after the social media giant blew past analyst expectations with its first-quarter report after Wednesday’s close; the company posted revenue of more than $26 billion and its highest monthly user level ever. 

Shares of Apple—the world’s most valuable company with a market cap of nearly $2.3 trillion—are also rising after an earnings report that far exceeded expectations, as revenue shot up nearly 54% to a record $89.6 billion thanks to blowout iPhone sales.

Though it also beat earnings expectations, Ford is falling 4% after it warned in its late-Wednesday earnings report that the global chip shortage plaguing several industries will shrink the company’s expected second-quarter production by about 50% and only “get worse before it gets better.”

Bolstered by pent-up demand, stimulus checks and the vaccine rollout, the U.S. economy grew at a 6.4% annualized rate in the first quarter of last year—exceeding economist projections of about 6% and marking a solid increase from 4.3% growth in the previous quarter.

Tangent

Another sign the economy could come back full force, first-time unemployment claims last week sank to a new pandemic low of 553,000—13,000 fewer claims than one week prior, though a staggering 16.6 million people are still receiving some form of unemployment benefit. 

Crucial Quote 

“Mega-cap technology firms are having a phenomenal reporting season—with Apple, Facebook and Alphabet all crushing expectations,” Vital Knowledge Media Founder Adam Crisafulli said in a Thursday morning note. “That said, expectations are already very high, which is why companies with ostensibly great results are struggling to rally… Even Microsoft [which fell 3% after earnings[ really wasn’t that bad—it just wasn’t as impressive as some of its super-cap peers.”

What To Watch For

Next on deck for big-tech earnings are Amazon and Twitter, which report after Thursday’s close. 

Further Reading

Unemployment Claims Sink To New Pandemic Low Of 553,000 (Forbes)

U.S. Economy Grew At 6.4% Annualized Rate In The First Quarter (Forbes)

Here’s Why Experts Think The Stock Market Could Rip Higher As Stocks Test New Highs (Forbes)

U.S. Economic Growth Is Peaking And That Means Stocks Could Struggle This Year, Goldman Warns (Forbes)