NEW YORK: Wall Street’s major stock indices rose on Wednesday (Feb 7), with the benchmark S&P 500 registering a record closing high, as investors applauded overall strength in US earnings and monitored Federal Reserve (Fed) comments for clues on interest rates.
The Dow Jones Industrial Average rose 156.00 points, or 0.40%, to close at 38,677.36 while the S&P 500 gained 40.83 points, or 0.82%, to finish at 4,995.06. The Nasdaq Composite gained 147.65 points, or 0.95 %, to 15,756.64.
The S&P notched another record closing high while the Nasdaq was still almost 2% shy of its record close of 16,057.44 reached in November 2021.
Shares in Chipotle Mexican Grill finished up 7.2% after it topped analyst estimates for quarterly profit and sales on strong demand for its burritos and rice bowls even as prices rose in its report issued late on Tuesday
Ford shares rose 6% as the automaker increased its first-quarter dividend and decided to scale back investments in new capacity for loss-making electric vehicles.
With more than half of the S&P 500 companies having reported quarterly results, 81.2% surpassed profit expectations, according to LSEG data on Tuesday.
“The optimism around, for the most part, better earnings results, continues to carry the day and continues to keep the market in a positive bias,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Among the 11 S&P 500 sectors, nine advanced, led by a 1.4% gain in the tech sector followed by consumer discretionary, which rose 1.1%. The weakest sector was consumer staples, which was down 0.08%.
James noted that investors have been fighting off “negativity overhanging the market” due to concerns about the banking and commercial real estate sectors since last week when New York Community Bancorp reported a surprise loss and cut its dividend.
“Elevated anxiety levels become self-fulfilling,” he said, also pointing to volatility among other regional banks. However, the KBW regional bank index pared some losses to close down 0.1% after falling more than 2% earlier in the day.
New York Community Bancorp shares rebounded in afternoon trading to close up 6.7%, shaking off an early decline of more than 13%. The lender’s newly appointed executive chairman Alessandro DiNello, vowed to cut its exposure in the troubled commercial real estate sector, where it took loan write-offs.
Shares in Snap slumped 34.6%, hitting a two-month low after it missed quarterly revenue estimates, as the Snapchat owner struggled to compete for advertising dollars.
Uber forecast quarterly core profit and gross bookings above estimates. However, its shares closed up just 0.3% as it deferred announcements around capital allocation plans to its investor day on Feb 14.
Fortinet shares rose 3.8% after the cybersecurity firm's fourth-quarter profit beat estimates. US-listed shares of Alibaba Group fell on its downbeat quarterly revenue report. – Reuters