By Will Horner and Sam Goldfarb
U.S. stocks climbed broadly for the third straight session
Wednesday as investors continued to turn their attention back to an
improving economic outlook and past the recent drama involving
GameStop and a handful of other stocks.
The S&P 500 climbed 0.3% after wavering earlier in the day.
The Dow Jones Industrial Average was up 0.2%, while the tech-heavy
Nasdaq Composite Index climbed 0.1%.
Stock markets have rallied this week, shaking off concerns about
stretched valuations, the threat of new coronavirus variants and a
sharp run-up in silver and a group of stocks popular with day
traders. Investors have focused instead on better-than-expected
corporate results, progress in coronavirus vaccinations and bets
that President Biden will deliver more fiscal spending in coming
weeks.
"The last two days have seen the return of the feeling that we
still have monetary stimulus in the background and the prospect of
an additional stimulus package to come," said Seema Shah, chief
strategist at Principal Global Advisors. "The path ahead isn't a
smooth one, but we think it is an upward one."
Giving investors further cause for optimism on Wednesday was
fresh economic data that showed continued improvement in the U.S.
services sector.
The Institute for Supply Management's services index for January
climbed to 58.7 in January from a revised 57.7 the previous month.
Economists surveyed by The Wall Street Journal had anticipated a
reading of 57.0.
Moving in tandem with stocks, the yield on the benchmark 10-year
U.S. Treasury note rose to 1.131% in recent trading from 1.105%
Tuesday. Yields, which rise when bond prices fall, tend to climb
when investors expect faster growth and inflation, along with more
government borrowing.
Investors, meanwhile, reacted to a mixed batch of corporate
earnings.
Shares in Alphabet climbed 8.5% after the parent of Google said
late Tuesday that it had booked record revenue in the fourth
quarter.
Spotify Technology, though, slipped around 8.1% after it offered
a cautious view of the year ahead early Wednesday, and Biogen fell
5.3% after it also offered downbeat guidance.
Amazon.com edged down 0.4%. The giant online retailer late
Tuesday posted record quarterly sales, marking the first time its
revenue crossed more than $100 billion in a three-month period. It
also said Jeff Bezos would be stepping down as CEO.
More companies including Qualcomm, PayPal Holdings and Costco
Wholesale were due to report earnings after markets close.
"Earnings have been definitely quite a bit stronger than anyone
expected, and they are led by the areas that we have so far seen
strength in: the tech sector, the stay-at-home sector," said Matt
Forester, chief investment officer of BNY Mellon's Lockwood
Advisors. "We still have a lot to see, though, particularly in the
sectors that have been so heavily impacted by Covid."
Investors are closely following talks between lawmakers over
another round of coronavirus relief measures. President Biden's
administration has called for a package totaling $1.9 trillion,
though a counter offer from Republicans this week was less than
half of that. The Democrats are expected to make a decision in
coming days on whether to start trying to quickly push into law a
larger stimulus bill on their own.
Some stocks that have soared in popularity among traders on
online forums edged higher Wednesday, after suffering sharp
reversals in the previous session. AMC Entertainment Holdings rose
11%, having fallen 41% on Tuesday. GameStop ticked up 4.3%, after
slumping 60% Tuesday.
Treasury Secretary Janet Yellen has called a meeting with top
financial regulators to discuss recent volatility in financial
markets related to GameStop, a Treasury spokeswoman confirmed
Tuesday night.
Last week, major stock indexes fell at the same time as stocks
at the center of the social media frenzy surged, suggesting that
headlines about the phenomenon were making some investors
nervous.
"Any time we see extensive volatility in markets that brings a
level of uncertainty for investors across the board," said Charlie
Ripley, senior investment strategist for Allianz Investment
Management.
Volatility, though, "has come down quite a bit from where it was
last week," he said.
In commodity markets, Brent crude, the international benchmark
for oil, rose 1.7% to $58.46 a barrel. The gauge is near its
highest level since the pandemic rattled global financial markets
last spring.
Silver prices 1.9% to $26.88 a troy ounce
Overseas, the pan-continental Stoxx Europe 600 rose 0.3%.
Italy's FTSE MIB stocks index outperformed other regional
benchmarks after former European Central Bank President Mario
Draghi was asked to form a new government.
In Asia, Japan's Nikkei 225 rose 1%. Hong Kong's Hang Seng added
0.2% while on the Chinese mainland, the Shanghai Composite Index
fell 0.5%.
Write to Will Horner at William.Horner@wsj.com and Sam Goldfarb
at sam.goldfarb@wsj.com
(END) Dow Jones Newswires
February 03, 2021 15:53 ET (20:53 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
QUALCOMM (NASDAQ:QCOM)
Historical Stock Chart
From Apr 2024 to May 2024
QUALCOMM (NASDAQ:QCOM)
Historical Stock Chart
From May 2023 to May 2024