A dovish statement from Federal Reserve Chair Jerome Powell increased enthusiasm for riskier assets, and Meta Platforms climbed on strict cost controls, helping the Nasdaq reach an intraday high that was nearly five months in the making.
After announcing a new $40 billion share repurchase and announcing that it would reduce costs by $5 billion in 2023 to between $89 billion and $95 billion, Facebook parent company META jumped 26.9% to a nearly eight-month high, a measure of S&P 500 Value.
IVX housing Meta increased 2% to a level not seen in over a year.
“It certainly seems that markets are up because earnings for Meta were surprisingly positive,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Along with the communication services sector, seven of the top 11 S&P 500 sectors increased. Meta’s stock, SPLRCL, increased 6.7% to reach its highest level in five months.
Nasdaq listed companies gain
Following the close of the markets, shares of Apple Inc. AAPL.O, Alphabet Inc. GOOGL.O, and Amazon.com Inc. AMZN.O all increased by 3.2% to 6.4% ahead of their quarterly results.
The major Wall Street indexes rose as Powell acknowledged that inflation was beginning to decline. On Wednesday, the US Federal Reserve raised interest rates by 25 basis points.
U.S. stocks have recovered strongly from a brutal 2022, with megacap companies benefiting from expectations that the FED will soften its hawkish stance on monetary policy.
“Investors are finally looking beyond the specter of the Federal Reserve raising rates. They see there is an eventual end to the misery of rate hikes and are realizing so many stocks were oversold in the misery of last year,” said Peter Andersen, founder of Andersen Capital Management.
Prior to Friday’s release of the nonfarm payroll figures, data revealed that unemployment claims surprisingly decreased last week to a nine-month low, underscoring the labour market’s resiliency.
The Dow Jones Industrial Average was 13:23 ET. S&P 500 index DJI was down 33.999.89 points, or 0.27%, at 33,999.89. Nasdaq Composite and SPX were up 61.41 points, or 1.49%, at 4,180.62. At 12,199.70, IXIC was up 383.38 points, or 3.24%.
The “golden cross” pattern on the S&P 500’s chart, which saw the 50-day moving average soar above the 200-day moving average, is interpreted by many as a bullish sign for near-term momentum.
After some of its components reported disappointing earnings, the price-weighted Dow was the only major index to experience losses. After reporting a 28.6% decline in quarterly profit, Honeywell International IncHON.O fell 0.5%.
Eli Lilly & CoLLY.N fell 5.5% after missing revenue projections for the most recent quarter, while pharmaceutical company Merck & CoMRK.N fell 4.6% due to a lower-than-expected annual forecast.
Align Technology Inc. ALGN.O increased 29.3% to a nine-month high after beating expectations for the first quarter in a row.
According to estimates from Refinitiv, analysts now anticipate a 2.4% decline in the quarterly earnings of S&P 500 companies.
On the NYSE and the Nasdaq, advancing issues exceeded declining ones by a ratio of 2.74 to 1 and 3.15 to 1, respectively.
The Nasdaq posted 135 new highs and nine new lows, compared to the S&P index’s 33 new 52-week highs and one new low.
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