S&P 500, Nasdaq rise as Amazon results overshadow jobs surprise

The S&P 500 edged higher in choppy trading on Friday as Amazon results lifted the mood at the end of a week of volatile trading that saw mixed earnings from Big Tech firms and a surprise jump in US jobs growth.

The Labor Department’s closely watched employment report on Friday 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.

“Employment report really stunned markets … not only did we have a surprisingly strong number, we had a very strong revision,” said Edward Moya, senior market analyst at Oanda.

“You also have average hourly earnings coming in much hotter than expected, which is just fueling the theme that everything is just leading to more inflation.”

Five of the 11 major S&P 500 sectors advanced, with consumer discretionary and energy stocks leading gains.

Fears of faster-than-expected rate hikes to curb a surge in inflation have haunted markets since the beginning of the year.

Amazon.com Inc jumped 9.4% after reporting robust earnings in the holiday quarter, wrapping up a mixed bag of earnings from megacap growth stocks that dictated market moves this week.

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 are 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, smaller social media companies such as Snap Inc surged 44% after reporting better-than-expected fourth-quarter user growth and outlook.

Pinterest Inc rose 2% 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 1.7%.

At 10:07 am the Dow Jones Industrial Average fell 64.33 points, or 0.18%, to 35,046.83, the S&P 500 gained 11.95 points, or 0.27 %, to 4,489.39, and the Nasdaq Composite gained 135.59 points, or 0.98 %, to 14,014.40.

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.

Declining issues outnumbered advancers by a 1.8-to-1 ratio on the NYSE. There were 75 new highs and 189 new lows on the NYSE. On the Nasdaq 1,625 stocks rose and 2,128 fell as declining issues outnumbered advancers by about a 1.3-to-1 ratio.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor