S&P, Nasdaq Enjoy Boost From Big Tech Firms, Dow Ends a Hair Lower
After a weak start following disappointing economic data from China, the S&P and Nasdaq gathered steam in late morning with gains in FAANG stocks – Facebook Inc, Apple, Amazon.com Inc, Netflix Inc, Alphabet Inc’s Google – as well as Microsoft Corp.
Apple shares closed 1% higher after the company made a splash by unveiling new Mac laptop computers with more powerful processor chips.
Facebook shares, under pressure recently, closed up more than 3% with some positive reports out including its plans to create 10,000 jobs in Europe to help build the so-called metaverse – an online world.
With just a small minority of companies having reported quarterly results so far, investors were hopeful for some good news in the days and weeks ahead.
“You’re going to get a heavier slate of earnings reports this week from a diverse set of industries,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, adding, “the path of least resistance remains higher going into earnings season for large-cap tech.”
The Dow Jones Industrial Average fell 36.15 points, or 0.1%, to 35,258.61, the S&P 500 gained 15.09 points, or 0.34%, to 4,486.46 and the Nasdaq Composite added 124.47 points, or 0.84%, to 15,021.81.
Forecast-beating results from big U.S. lenders last week had set a positive tone for third-quarter earnings season, with analysts expecting S&P 500 earnings to show a 32% rise from a year ago, according to Refinitiv data.
The solid start likely helped investors shrug off uneasiness from earlier in the day after China recorded its slowest pace of economic growth in a year for the third quarter, hurt by power shortages and wobbles in the property sector. [MKTS/GLOB]
Other top contributors to the S&P’s gains were Tesla Inc ahead of its earnings report this week, Amazon, which added 1% and chipmaker Nvidia Corp, which closed up 1.6%.
While technology, closing up 0.9%, was the S&P’s top index point boost, consumer discretionary was the biggest percentage gainer, climbing 1.2% and communications services followed with a 0.7% gain.
Johnson & Johnson, Netflix, Verizon Communications Inc and oilfield services company Baker Hughes Co are also due to report quarterly results this week.
But while mega tech gainers were strong enough to boost the S&P and the Nasdaq, optimism was not widespread with four industry sectors closing in the red.
Of the S&P’s 11 major sectors, seven closed higher. The biggest decliners were utilities, down 0.97%, and healthcare, down 0.7%.
Shares of Walt Disney Co closed down 3% after Barclays downgraded the media giant’s stock to “equal weight” from “overweight.”
Declining issues outnumbered advancing ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.
The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 65 new highs and 113 new lows.
Volume on U.S. exchanges was 9.1 billion shares, compared with the 10.3 billion average for the last 20 trading days.
For a look at all of today’s economic events, check out our economic calendar.
(Reporting by Sinead Carew in New York and by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)