NEW YORK CITY, RAW – Another bumpy ride on Wall Street has ended as Amazon’s positive earnings capped a run of mixed big-tech numbers, with the Nasdaq recovering much of its losses from the previous session and all three benchmarks ending the week in positive territory.
Results from megacap growth stocks have dictated market moves this week, as investors seek out tangible data to support sky-high valuations.
Amazon.com Inc jumped 13.5 per cent after reporting robust earnings in the holiday quarter. The gain expanded its market capitalisation by about $US190 billion, the largest ever single-day increase in value of a US company.
This came a day after Facebook-owner Meta Platforms Inc’s disappointing results shook markets and wiped more than $US200 billion off its valuation, the deepest loss of stock market value in history by a US company.
“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 indices ended their first week of February higher, with the indexes posting their second week of gains in a row.
While Meta lost another 0.3 per cent on Friday, other social media companies which had been dragged down with the Facebook owner rebounded strongly as they posted estimate-beating earnings of their own.
Among them was Snap Inc, surging 58.8 per cent after reporting better-than-expected fourth-quarter user growth and outlook.
Pinterest Inc also jumped 11.2 per cent after its quarterly revenue beat estimates as retailers splurged on advertising during the holiday quarter.
The Dow Jones Industrial Average on Friday fell 21.42 points, or 0.06 per cent, to 35,089.74, the S&P 500 gained 23.09 points, or 0.52 per cent, to 4,500.53 and the Nasdaq Composite added 219.19 points, or 1.58 per cent, to 14,098.01.
Among the major S&P 500 sectors that advanced, energy stocks hit their highest since 2018 as crude prices touched a seven-year peak.
Hess Corp was the largest gainer in the sector, jumping four per cent to its highest close since September 2014. Occidental Petroleum Corp gained 2 per cent, with its shares ending at levels last seen in February 2020.
Consumer discretionary was the leading sector though, up 3.7 per cent as it was bolstered by Amazon’s performance. The tech behemoth’s gains helped alleviate the drag of Ford Motor Co , which slumped 9.7 per cent after the automaker posted disappointing quarterly numbers.
The Labor Department’s closely watched employment report 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.
Fears of faster-than-expected rate hikes to curb a surge in inflation have haunted markets since the beginning of the year.
The rate hike prospect has boosted US Treasuries, with yields on the 10-year benchmark hitting their highest levels since December 2019, following the payrolls data.
This is regarded as positive for financials, with Bank of America Corp, Morgan Stanley and Wells Fargo & Co all gaining between 1.8 per cent and four per cent on Friday.
Volume on US exchanges was 11.07 billion shares, compared with the 12.37 billion average for the full session over the last 20 trading days.
The S&P 500 posted 26 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 36 new highs and 196 new lows.