Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Indexes & Markets

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

U.S. Stocks Rise Ahead of Tech Earnings -- Update

10/29/2020 | 03:17pm EST

By Caitlin Ostroff and Amber Burton

U.S. stocks rose Thursday, rebounding after fresh data showed jobless claims dropped and the economy expanded sharply in the third quarter.

The Dow Jones Industrial Average gained 137 points, or 0.5%, as of the 4 p.m. close of trading in New York. The S&P 500 added 1.2%. Both indexes on Wednesday suffered their biggest one-day percentage declines since June.

The Nasdaq Composite advanced 1.6% ahead of earnings reports from some of the biggest companies in the technology sector.

Fresh data showed that 751,000 Americans applied for initial unemployment benefits through the week ended Saturday, down from a seasonally adjusted 791,000 in the prior week. The decline is a sign that the labor market is slowly recovering, though claims remain at historically high levels.

Meanwhile, U.S. gross domestic product for the third quarter rose at an annual pace of 33.1%, the biggest gain ever. The increase followed a record drop in output earlier in the year when the virus and related shutdowns disrupted business activity across the country.

Apple, Alphabet, Facebook, Amazon.com and Twitter are scheduled to report their latest financial results after markets close, marking what may be the most important day of the current earnings season for the tech sector. The stocks have posted sweeping gains this year, with investors betting that those businesses stand to benefit during the coronavirus-pandemic lockdowns.

The handful of stocks now account for a significant portion of the S&P 500 benchmark. That means investors' perception of the health of their operations can weigh on broader market sentiment and lead to volatility in the index.

"What I'm not looking at is what happened in the last quarter: because the recovery was so strong, it's almost a given that there is an improvement," said Luca Paolini, chief strategist at Pictet Asset Management. "What I want to see is companies feeling confident [enough] to give us guidance for the next few quarters."

If companies find that the economic outlook is too cloudy, and they don't have visibility on prospects for their businesses, they may revert to their behavior in March and avoid offering projections, he said. That would likely deal a blow to investors' confidence.

Tim Courtney, chief investment officer at Exencial Wealth Advisors, said he expects markets will remain volatile for the near future.

"We're going to have volatility probably through the end of the year, probably into next year until we start to get clarification on regulation of the tech industry and whether or not it looks like a vaccine is coming," he said.

Mr. Courtney said he remains relatively unfazed by the way the markets are jumping around because of the unique circumstances of rising Covid-19 cases and the election.

Ford Motor shares rose 2.9% after the company posted about $2.4 billion in earnings for the third quarter. Shares of Boston-based drugmaker Alexion Pharmaceuticals rose 2.8% after it reported better-than-expected profit and sales.

Shares of Kraft Heinz gained 2.5% after the company reported earnings that beat analysts' expectations and raised its guidance.

The Cboe Volatility Index, a gauge of investors' expectations for swings in U.S. stocks, fell Thursday but remains near its highest level since June.

Worries that an uptick in Covid-19 cases will lead to new lockdowns and restrictions, which could erode the pace of economic recovery, have weighed on markets this week in both the U.S. and Europe. The U.S. reported nearly 79,000 new coronavirus cases for Wednesday, the second day in a row the total has come in over 70,000, according to data compiled by Johns Hopkins University.

France and Germany on Wednesday unveiled new restrictions on business and social activity, including shutting down restaurants, bars and some shops for a few weeks to stem the rising tide of infections. Leaders in both countries aimed to cushion the economic impact of the restrictions, saying factories and schools would remain open.

"If you look at the market action in the last week, it's pretty clear that Covid-19 is the key market mover," Mr. Paolini said.

The U.S. election also remains in focus, with many investors remaining cautious about placing big bets ahead of the Nov. 3 vote.

Still, this week's selloff could present a buying opportunity for some investors, and help stock indexes recover some losses.

"The phenomenon that we've seen is that when markets correct, you get people to come in and think this is an opportunity to buy," said Daryl Liew, chief investment officer at REYL Singapore. "The reality is that investors still have a lot of cash. It's not a liquidity crisis for most people."

In bond markets, the yield on the 10-year Treasury ticked up to 0.811%, from 0.780% Wednesday.

In commodities, oil extended its selloff. Brent crude, the international gauge, retreated 4.1% to $38.02 a barrel.

The ICE U.S. Dollar Index, which measures the greenback against a basket of currencies, gained 0.7%. The dollar typically rises when stock indexes fall due to its status as a haven currency.

Overseas, the Stoxx Europe 600 ticked down 0.1%.

In the Asia-Pacific region, stock benchmarks were mixed. The Shanghai Composite Index edged up 0.1% while Australia's benchmark S&P/ASX 200 declined 1.6%.

--Joanne Chiu contributed to this article.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

10-29-20 1616ET

Stocks mentioned in the article
ChangeLast1st jan.
ALEXION PHARMACEUTICALS, INC. 0.41% 123.11 Delayed Quote.13.37%
APPLE INC. 1.16% 115.17 Delayed Quote.55.08%
DJ INDUSTRIAL 1.54% 30046.24 Delayed Quote.3.69%
EURO / US DOLLAR (EUR/USD) -0.09% 1.18853 Delayed Quote.6.09%
FACEBOOK INC 3.16% 276.92 Delayed Quote.34.92%
FORD MOTOR COMPANY 6.66% 9.45 Delayed Quote.1.61%
LONDON BRENT OIL 0.33% 48.04 Delayed Quote.-30.61%
NASDAQ 100 1.46% 12079.806406 Delayed Quote.38.32%
NASDAQ COMP. 1.31% 12036.785414 Delayed Quote.32.41%
S&P 500 1.62% 3635.41 Delayed Quote.12.52%
S&P/ASX 200 0.59% 6683.3 Real-time Quote.-0.60%
S&P/CITIC 300 INDEX 0.00% 4272.74 Delayed Quote.22.01%
S&P/CITIC 50 INDEX 0.00% 4282.76 Delayed Quote.15.81%
STOXX EUROPE 600 -0.30% 391.2 Delayed Quote.-5.64%
THE KRAFT HEINZ COMPANY 3.77% 33.83 Delayed Quote.5.29%
WTI 0.69% 45.065 Delayed Quote.-29.68%
Latest news "Markets"
05:43aStock Futures Pause After Dow's 30000 Milestone
05:36aSensex, Nifty slide as investors lock in gains after record high
04:56aEUROPE : European shares hover near nine-month highs on easing virus curbs, vaccine cheer
04:28aWALL STREET STOCK EXCHANGE : Stocks hit record high as Biden transition, vaccines brighten outlook
04:27aMelrose lifts FTSE 100 ahead of Sunak's spending plan announcement
02:37aFLIRTING WITH RECORD HIGHS : European stocks back to normal in 2021 - Reuters poll
02:26aCanada's TSX to hit record high in 2021 on likely vaccine rollout
11/24ANALYSIS : Dow cracks 30,000, a psychological boost during a pandemic
11/24WALL STREET STOCK EXCHANGE : Vaccines, Biden drive Dow, S&P to record highs
11/24Inside Tuesday's Historic Dow Move -- Update
Latest news "Markets"