Wall Street indexes moved higher on Friday in seesaw trading, recovering some of the ground lost in the previous session, as Amazon’s positive numbers boosted sentiment after a mixed week of big-tech earnings.
Amazon.com Inc jumped 15.5% after reporting robust earnings in the holiday quarter. Results from megacap growth stocks have dictated market moves this week, as investors seek out tangible data to support sky-high valuations.
Facebook-owner Meta Platforms Inc’s historic plunge after disappointing results shook markets on Thursday, sending the Nasdaq nearly 4% lower.
“These are eye-watering, stomach churning moves normally associated with penny stocks, and yet they are happening in companies with billion-dollar market caps,” said Michael Hewson, chief market analyst at CMC Markets UK.
Despite the earnings-driven whiplash in technology stocks, all three major stock indexes were on track to end their first week of February higher, with the indexes eyeing their second week of gains in a row.
Following losses on Thursday, social media companies such as Snap Inc surged 54.7% after reporting better-than-expected fourth-quarter user growth and outlook.
Pinterest Inc rose 8.1% after its quarterly revenue beat estimates as retailers splurged on advertising during the holiday quarter, while Twitter Inc, expected to report results on Feb. 10, rose 6.6%.
By 1:50 p.m. ET (1850 GMT), the Dow Jones Industrial Average rose 60.4 points, or 0.17%, to 35,171.56, the S&P 500 gained 39.78 points, or 0.89%, to 4,517.22 and the Nasdaq Composite added 262.29 points, or 1.89%, to 14,141.11.
Five of the 11 major S&P 500 sectors advanced, with energy stocks at the highest since 2018 as crude prices touched a seven-year peak. [O/R]
Hess Corp was the largest gainer in the sector, jumping 4.2% to its highest level since October 2014. Occidental Petroleum Corp gained 2.4%, with its shares trading at levels last seen in February 2020.
Consumer discretionary was the leading sector though, up 4.3% as it was bolstered by Amazon’s performance.
Of the 278 S&P 500 companies that have reported results so far during this earnings season, 78.4% of them have beaten analysts’ earnings estimates, compared with an average of 84% over the past four quarters, according to Refinitiv data.
The Labor Department’s closely watched employment report showed nonfarm payrolls increased by 467,000 jobs last month, compared with the 150,000 jobs addition forecast by economists polled by Reuters.
The data for December was revised higher to show 510,000 jobs created, instead of the previously reported 199,000.
Fears of faster-than-expected rate hikes to curb a surge in inflation have haunted markets since the beginning of the year, with growth stocks such as technology feeling the brunt of that as investors pivot towards current cash flow from betting on future expectations.
“A lot of the high-valuation stuff is going to continue to have trouble and it’s already gotten smacked down a lot,” said Louis Ricci, head of trading at Emles Advisors.
“To us, this jobs report was affirmation that, yes, stocks are going to be jittery and there’s going to be a lot of volatility.”
