On Thursday, the main index on Wall Street recorded gains in a rally that happened in the late afternoon also because heavyweight growth stocks rose, including those of Tesla.
Indexes and stocks rise
There was a 1.4% rise in the tech-focused Nasdaq, while the S&P 500 climbed to its highest level since 9th June. There was also a 0.5% increase in the Dow Jones Industrial Average. A 9.8% rise in shares of Tesla Inc. was recorded after the second quarter results of the electric automaker turned out to be better than expected.
The gains helped in countering the decline in energy and telecom shares, while there was a fall in AT&T Inc.’s share prices. The wireless carrier disclosed that some of its customers were putting off their bill payments due to which it reduced its cash flow forecast, sending telecom shares down.
There was also a dip in energy shares because of falling crude prices. Market analysts said that the earnings season was turning out to be better than expectations had feared. While investors think that there has been a lot of decline in the tech sector, there could be some valuation opportunities.
There was a gain of 1.5% in both Amazon.com and Apple Inc.’s shares, with both companies reporting their second-quarter earnings on 28th July. There was a 0.51% rise in the Dow Jones Industrial Average, as it increased by 162.06 points to reach 32,036.9. A 0.99% gain was recorded in the S&P 500, which climbed 39.05 points to reach 3,998.95. A 1.36% gain saw the Nasdaq Composite rose by 161.96 points to reach 12,059.61.
Out of the 11 major S&P 500 sectors, 9 of them ended the day in positive territory, with information technology, healthcare, and consumer discretionary stocks recording the biggest gains, as they each added over 1%.
The S&P 500 sector had taken a hit because of a decline in energy prices, which fell 1.7% and were leading declines amongst all sectors. All market participants are now waiting for next week’s meeting of the US Federal Reserve where a 75 basis points increase is expected from policymakers for curbing runaway inflation.
The European Central Bank also joined its global peers by hiking the interest rate by 50 basis points in its policy meeting on Thursday in order to control inflation that continues to surge.
After the US Fed’s meeting next week, there is economic data on the slate, as gross domestic product data for the US in the second quarter will be disclosed. It is expected to be negative once more and this would mean that the economy is in recession, as per a rule of thumb.
The latest data showed that there was an increase in the number of Americans who applied for unemployment benefits, as the number hit its highest in about eight months. This data ended up fueling worries of an economic recession. The trading volume on US exchanges was also lower than in the last 20 days.