MarketsS&P 500 index
Feb 03, 2024 05:10 AM EST
The S&P 500 reached a record closing high on Friday as solid profits and an impressive January jobs report increased investor confidence in the economy, despite the Federal Reserve's unlikely decision to drop interest rates anytime soon. U.S. equities closed the week significantly higher.
The surge concluded a turbulent week that included high-profile results, a Fed rate announcement, and a resurgence of concerns about regional banking fragility.
The S&P 500 index (.SPX) and the Nasdaq Composite Index (.IXIC), both saw gains of over 1% thanks to strong quarterly results from Meta Platforms (META.O) and Amazon.com, although the advance on the blue-chip Dow Jones Industrial Average (.DJI) was less pronounced. The three main U.S. market indexes had weekly advances for the fourth time in a row.
According to the Labor Department, the U.S. created 353,000 new jobs in January, well above economists' projections, while pay growth unexpectedly picked up speed.
The likelihood that the U.S. central bank will postpone lowering its main policy rate until far later than many had anticipated increased with the further indications of economic strength. Fed Chair Jerome Powell rejected the idea of a rate reduction in March on Wednesday.
According to CME's FedWatch tool, financial markets are pricing in a 20.5% chance of a 25 basis point rate drop at the Fed's March meeting, down from 69.6% a month earlier.
With 230 of the S&P 500 businesses having released their quarterly results, the fourth-quarter earnings season is rapidly approaching. LSEG reports that eighty percent of those had performed better than Wall Street anticipated.
Analysts' overall projection for S&P 500 profits growth from October to December is currently 7.8% year over year, which is a considerable improvement above the 4.7% forecast they had as of January 1.
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Days before the 20th anniversary of its Facebook business, Meta Platforms announced its first dividend, which sent the company soaring 20.3% to a new high.
After reporting revenue that above expectations for the fourth quarter, Amazon.com (AMZN.O) saw a 7.9% increase as new generative artificial intelligence capabilities in cloud and e-commerce companies drove strong growth over the year-end holidays.
Following two days of severe sell-offs triggered by New York Community Bancorp (NYCB.N)'s underwhelming earnings, regional bank shares steadied. The bank's shares increased 5.0% on Friday, while the KBW Regional Banking index (.KRX) gained 0.2%.
At 4,958.61 points at the close of the session, the S&P 500 increased by 1.07%. The Dow Jones Industrial Average increased by 0.35% to 38,654.42 points, while the Nasdaq gained 1.74% to 15,628.95 points.
Six of the eleven S&P 500 sector indices saw increases, with communication services (.SPLRCL) leading the way at 4.69%, and consumer discretionary (.SPLRCD) coming in second at 2.49%.
The health insurance firm increased its annual profit prediction, which caused Cigna (CI.N) to rise 5.4%. Following the chipmaker's unsatisfactory sales estimate, Microchip Technology (MCHP.O) fell 1.6%.
The stock of footwear manufacturer Skechers U.S.A. (SKX.N), which also issued a negative outlook, fell 10.3%. Chevron Corp (CVX.N), a large oil company, increased 2.9% after outperforming expert forecasts. Within the S&P 500 (.AD.SPX), declining equities outnumbered rising ones by a ratio of 1.2 to one.
There were 68 new highs and four new lows for the S&P 500, while there were 75 new highs and 144 new lows for the Nasdaq.
With 11.2 billion shares moved, there was very low volume on U.S. exchanges as compared to the average of 11.6 billion shares for the preceding 20 sessions.
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