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Merck up after posting better-than-expected quarterly results
Qualcomm down on market-share concerns in China
U.S. regional bank shares tumble for second straight day
Business activity picks up in Jan – ISM
Indexes up: Dow 0.59%, S&P 0.83%, Nasdaq 0.91%
Updated at 12:10 p.m. ET/1710 GMT
By Ankika Biswas and Johann M Cherian
Feb 1 (Reuters) – Wall Street bounced back on Thursday, after a selloff in the previous session as the U.S. Federal Reserve dashed hopes for early interest rate cuts, with focus moving to Big Tech earnings due later in the day.
The S&P 500 and the Nasdaq on Wednesday notched their biggest one-day percentage declines since September and October, respectively, after the Fed reminded markets of its undeterred focus on battling inflation, smashing speculations of policy easing kicking off in March.
Consumer staples shares .SPLRCS led gains with a 1.6% rise among the 11 major S&P 500 sectors, boosted by a 3.3% jump in Altria Group MO.N after the tobacco giant posted a fourth-quarter profit beat and authorized a new share buyback plan.
Communication services shares .SPLRCL gained 1.1%, while the financial sector .SPSY was the only one in the red and down 0.4%.
A selloff in shares of U.S. regional banks continued on Thursday, with New York Community Bancorp NYCB.N down 10.7%.
The KBW Regional Banking index .KRX fell 3.7%, on track for its steepest two-day decline since March last year.
On the data front, weekly jobless claims rose to a seasonally adjusted 224,000, higher than the expected 212,000, while a report showed job cut announcements in January rose to a 10-month high.
Separately, U.S. manufacturing stabilized in January amid a rebound in new orders, but inflation at the factory gate picked up.
“The Fed needed more time to explore incoming data and they didn’t feel the need to be in a hurry to cut. I was never expecting March,” said Todd Morgan, chairman of Bel Air Investment Advisors.
Focus moves back to Big Tech earnings that would shed light on whether megacap stocks can sustain their recent rally, fueled by the hype around artificial intelligence and hopes of early rate cuts.
Apple’s AAPL.OiPhone sales are expected to have seen the best growth in five quarters, but analysts see a tough year for the company in China, while investors will monitor whether Amazon.com AMZN.O can cash in on its delivery heft by boosting fee revenue from its “Buy With Prime” service.
Meta Platforms META.O is likely to see a muted impact from generative AI on its advertising business.
The three tech giants, up between 0.9% and 1.6%, will report earnings after the closing bell, a day after investors punished Alphabet GOOGL.O and Microsoft MSFT.O on mounting costs of developing generative AI-powered products.
At 12:10 p.m. ET, the Dow Jones Industrial Average .DJI was up 225.17 points, or 0.59%, at 38,375.47, the S&P 500 .SPX was up 40.29 points, or 0.83%, at 4,885.94, and the Nasdaq Composite .IXIC was up 137.74 points, or 0.91%, at 15,301.75.
Merck MRK.N climbed 3.5% following the drug maker’s upbeat fourth-quarter results, while Dow component Honeywell HON.O dropped 3.1% after the diversified industrial firm forecast a weak first-quarter profit.
Qualcomm QCOM.O fell 3.9% on concerns over Android sales in China.
Advancing issues outnumbered decliners for a 2.32-to-1 ratio on the NYSE and a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and five new lows, while the Nasdaq recorded 51 new highs and 96 new lows.
Fed holds interest rates steady https://reut.rs/47YhvGP
(Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Additional reporting by Shubham Batra; Editing by Shounak Dasgupta)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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