U.S. stock markets closed higher on Thursday after Treasury yields retreated globally. As a result, the fear of an imminent interest rate hike by the Fed was reduced to some extent. Earnings results remained strong boosting investor sentiment. All three major stock indexes ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.2% or 624.16 points to close at 53,686.11. Twenty-three components of the 30-stock index ended in positive territory and seven ended in negative territory. The tech-heavy Nasdaq Composite ended at 26,584.06, advancing 1.4% or 366.23 points on solid performance by technology bigwigs.
The S&P 500 gained 1.1% to finish at 7,747.71. Nine out of 11 sectors of the broad-market index ended in positive territory while two finished in negative territory. The Materials Select Sector SPDR (XLB) and the Communication Services Select Sector SPDR (XLC) rose 1.7% and 1.4%, respectively.
The fear gauge CBOE Volatility Index (VIX) fell 5.8% to 14.32. A total of 15.25 billion shares were traded on Thursday, higher than the last 20-session average of 15.09 billion. Advancers outnumbered decliners on the NYSE by a 1.98-to-1 ratio. On the Nasdaq, a 1.67-to-1 ratio favored advancing issues.
Yields on Sovereign Bonds Fall
Federal Reserve Governor Christopher Waller said that he would like to maintain the status quo for the Fed funds rate at the FOMC meeting in September unless upcoming inflation data shows any major surprise. Following Waller’s comment, the yield on the U.S. benchmark 10-Year Treasury Note declined to 4.77% from 4.818% the previous day, which was its highest level since November 2023. Moreover, Japan’s benchmark 10-Year Treasury Note yield also declined.
Strong Earnings Results
Snowflake Inc. SNOW came up with quarterly adjusted earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.45 per share. The company posted quarterly revenues of $1.55 billion, surpassing the Zacks Consensus Estimate by 4.91%.
Hewlett Packard Enterprise Co. HPE came up with quarterly adjusted earnings of $1.11 per share, beating the Zacks Consensus Estimate of $0.95 per share. The company posted quarterly revenues of $12.21 billion, surpassing the Zacks Consensus Estimate by 1%.
As a result, stock prices of Snowflake and Hewlett Packard Enterprise jumped 16.6% and 5%, respectively. Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of Labor reported that initial claims increased by 2,000 to 206,000 for the week ended Aug. 29, marginally above the Zacks Consensus Estimate of 205,000. The previous week’s data was revised marginally upward to 204,000 from 203,000 reported earlier.
Continuing claims (those who have already received government aid and reported a week behind) increased 8,000 to 1.779 million for the week ended Aug..22. The previous week's level was revised downward by 7,000 to 1,771,000 from 1,778,000 reported earlier.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported that the goods and services deficit was $88.6 billion in July, higher than the Zacks Consensus Estimate of $85 billion. The metric for June was revised downward to a deficit of $71.2 billion from $73.3 billion reported earlier.
The Institute of Supply Management reported that the services purchasing managers index came in at 55.4%, missing the Zacks Consensus Estimate of 57.1%. The metric for July was 54.1%. Any reading above 50% indicates expansion of services activities.
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This article originally published on Zacks Investment Research (zacks.com).
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