Market close: Tech sends Nasdaq to new highs
20:31, 28 October 2021
Stock markets on Thursday rebounded from a down day Wednesday, driven by heavy activity from the tech sector that drove the Nasdaq to new highs.
The Dow Jones Industrial Average rose 239 points or 0.68% while the S&P 500 gained 44 points for a 0.98% increase. Those gains largely erased the mild declines the indexes experienced during the prior trading session when earnings seemed to be falling below expectations amid supply chain constraints that are cutting into corporate profits.
Through the first half of the third-quarter results season, earnings are coming in 12% above expectations and sales were up 2.2%. Both figures are the lowest in six quarters, according to a report from Bank of America obtained by Capital.com. The bank is tracking 3Q earnings growth of 32.9% year over year on 13.8% revenue growth.
Nasdaq highs
The tech-heavy Nasdaq index gained 212 points on the day closing at 15,448 for a 1.39% gain.
The closing price was just off new intra-day highs of 15,452, which were driven by gains for Apple and Amazon on optimism for their earnings reports that are reported after market close Thursday. Likewise, Tesla continued its recent rally with a 3% gain.
Some of those gains were weighed down by eBay, which closed more than 6% lower for one of the biggest losses on the day. The decline was driven by eBay’s holiday performance forecast, which fell below analysts' expectations.
Shares in Facebook surged as much as 4% higher on the day but erased some of those gains, closing 1.5% higher after it announced the parent company’s new name – Meta. The rebrand intends to signal the company’s focus on the “metaverse,” which encompasses its virtual reality products under the Oculus brand. Social media site Facebook will continue to operate under than name alongside Instagram and WeChat under the Meta umbrella.
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Jobless claims
Markets were also encouraged by US jobless claims, which fell by 10,000 week over week hitting new lows not seen since the early days of the pandemic.
Initial jobless claims for the week ending 23 October came in at 281,000 compared with the previous week’s revised figure of 291,000 claims. At that level, jobless claims are at their lowest since 14 March 2020 when claims totalled 225,500.
The economic numbers may be one catalyst for a rebound in Treasuries that rose back to 1.57% on the 10-year rate Thursday after falling 9 basis points the day prior to 1.54%.
Next week the Federal Reserve meets to determine when and how to begin winding down its asset purchase program that supported the economy through the worst of the pandemic.
Global markets
In Asian markets, the Shanghai Composite is 1.23% lower while Tokyo’s Nikkei 225 fell 0.96% on the day.
Meanwhile, the pan-European Stoxx 600 index gained 0.15% on the day. Canada's S&P / TSX Composite ended the day up 1.16%.
Read more: Facebook changes name to Meta as it bets on virtual worlds
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