Nasdaq, S&P 500 Reach Record Closing Highs On Upbeat Earnings News

Stocks moved mostly higher during trading on Thursday, offsetting the pullback seen late in the previous session. With the upward move on the day, the tech-heavy Nasdaq and the S&P 500 reached new record closing highs.

The major averages saw further upside going into the close of trading. The Dow climbed 239.79 points or 0.7 percent to 35,730.48, the Nasdaq surged 212.28 points or 1.4 percent to 15,448.12 and the S&P 500 jumped 44.74 points or 1 percent to 4,596.42.

A positive reaction to the latest batch of earnings news from big-name companies helped stocks renew the upward trend seen in recent sessions.

Shares of Ford (F) moved sharply higher after the auto giant reported much better than expected third quarter earnings and raised its full-year guidance.

Brewer Anheuser-Busch InBev (BUD) also spiked after raising its full-year forecast following a strong third quarter.

Shares of Caterpillar (CAT) and Merck (MRK) also showed strong moves to the upside after the heavy equipment maker and drugmaker reported quarterly earnings that beat expectations.

On the other hand, shares of eBay (EBAY) came under pressure after the eCommerce giant reported better than expected third quarter results but provided disappointing guidance.

Adding to the positive sentiment on Wall Street, a report from the Labor Department showed initial jobless claims decreased for the fourth straight week in the week ended October 23rd.

The report said initial jobless claims dipped to 281,000, a decrease of 10,000 from the previous week’s revised level 291,000. Economists had expected jobless claims to come in unchanged compared to the 290,000 originally reported for the previous week.

With the modest decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.

Meanwhile, traders largely shrugged off a report from the Commerce Department showing a dramatic slowdown in the pace of U.S. economic growth in the third quarter, potentially viewing the data as old news.

The Commerce Department said real gross domestic product increased by 2.0 percent in the third quarter after jumping by 6.7 percent in the second quarter. Economists had expected the pace of GDP growth to slow to 2.7 percent.

The bigger than expected slowdown in GDP growth came as consumer spending rose by 1.6 percent in the third quarter after spiking by 12.0 percent in the second quarter.

Sector News

Computer hardware stocks saw substantial strength on the day, with the NYSE Arca Computer Hardware Index surging up by 2.4 percent.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.3 percent jump by the Philadelphia Semiconductor Index.

Shares of Wolfspeed (WOLF), formerly known as Cree, skyrocketed after the company reported a narrower than expected fiscal first quarter loss.

Biotechnology stocks also turned in a strong performance on the day, driving the NYSE Arca Biotechnology Index up by 1.8 percent.

Oil service, housing and commercial real estate stocks also moved notably higher, while gold stocks bucked the uptrend despite an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1 percent, while China’s Shanghai Composite Index tumbled by 1.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index advanced by 0.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index both edged down by 0.1 percent.

In the bond market, treasuries gave back ground after moving notably higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.9 basis points to 1.568 percent.

Looking Ahead

Earnings news is likely to remain in the spotlight on Friday, with Amazon (AMZN) and Apple (AAPL) among the companies reporting their quarterly results after the close of today’s trading.

Energy giants Chevron (CVX) and Exxon Mobil (XOM) are also among the companies due to report their results before the start of trading on Friday.

A report on personal income and spending may also attract attention, although trading activity may be somewhat subdued ahead of next week’s Federal Reserve meeting.

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