Stocks finished Thursday higher as strong results from Meta Platforms boosted tech-related names.
The Dow Jones Industrial Average advanced 524.29 points, or 1.57%, to close at 33,826.16. The Nasdaq Composite jumped 2.43% to finish at 12,142.24, while the S&P 500 climbed 1.96% to end at 4,135.35. It was the best day since January for the Dow and S&P 500 and since March for the Nasdaq.
Meta shares leapt 13.9% after the company reported quarterly revenue that topped expectations and issued an upbeat forecast. Several analysts hiked their price targets following the release. Shares of other tech-related names such as Amazon, Alphabet, Microsoft and Apple also popped.
"The market was waiting with bated breath for Big Tech," said Quincy Krosby, chief global strategist at LPL Financial. "Across the board, it hasn't disappointed, and the market needed that."
Stocks rose despite weaker-than-expected GDP data, which may suggest to some investors that the Federal Reserve could soon wrap up its tightening campaign. The Fed is slated announce its latest policy decision next week.
The U.S. economy grew 1.1% in the first quarter, while economists polled by Dow Jones forecasted an expansion of 2%. The report also showed stronger-than-expected inflation, with prices increasing 4% compared with a consensus estimate of 3.7%.
Honeywell, an industrial bellwether, added more than 4% on the back of a quarterly report that was better than Wall Street expected. Teladoc and Comcast were among the other companies trading higher after releasing earnings reports.
The Dow and S&P 500 are slightly above their flatlines for the week-to-date, while the Nasdaq has gained 0.6% over the same period. But the Nasdaq has lagged on a month-to-date basis, shedding 0.7% while the Dow and S&P 500 rose 1.7% and 0.6%, respectively, since April began.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Stocks finish higher
Individual investor stock market bearishness elevated for 10th week, AAII says
Individual investor pessimism toward stocks rose to 38.5% from 35.1% in the latest weekly survey, the 10th week in a row bearishness is above its historic average of 31%, the American Association of Individual Investors said.
Optimism that stocks will rise in price over the next six months narrowed to 24.1% from 27.2% last week, while neutral opinion (that stocks won't move much) was little changed at 37.4%, from 37.7% last week.
Neutral sentiment is above the historical average (31.5%) for the 16th week in the past 17, the AAI said.
Bearish sentiment that's "now approaching an unusually high level again," according to the AAII, is a good sign for contrarian investors. The thinking goes that the more bearish investors say they are, the closer they are to having finished their sales of stock, and the higher their cash holdings, giving them firepower to put into stocks.
AAII members answered a special question this week that asked "if they think investors are too bullish or bearish right now." Their answer:
- Investors are too bullish: 30.4%
- Investors are too bearish: 30.4%
- Sentiment toward the market is about right: 18.6%
- No opinion/unsure: 20.6%
Could there be a clearer signal of the market's current tug-of-war?
— Scott Schnipper
Hershey hits all-time high after earnings beat
Hershey also raised its guidance for net sales group and earnings per share to the high end of its previous outlook.
The growth in the first quarter came from a combination of volume gains and higher prices, the company said.
And Hershey isn't done raising prices. CFO Steve Voskuil said on the earnings call that consumer demand is holding up better than previously expected, according to a transcript from FactSet.
— Jesse Pound
Stocks remain up as final hour of trading kicks off
Don't write off Activision Blizzard, Barclays says
The firm raised its price target on the company on Wednesday, and said the company can remain strong on its own.
"Despite the deal likely dead in water, we view this as a strong buying opportunity given its cheap relative valuation to EA, momentum in core franchises (CoD/Candy Crush), along with upcoming catalysts in Diablo 4/Warzone Mobile," Barclays analyst Mario Lu wrote Wednesday.
Read the full story here.
— Brian Evans
Communication services sector headed toward best day since February
KLA shares among notable Nasdaq gainers
KLA climbed more than 5% after the semiconductor equipment maker's latest fiscal third quarter results beat estimates on the top and bottom lines, according to consensus estimates from FactSet.
— Sarah Min
Stocks making the biggest moves Thursday
Check out the companies making headlines in midday trading.
Honeywell International — Shares climbed 3.2% after Honeywell exceeded expectations on the top and bottom lines in its latest quarter. The conglomerate reported adjusted first-quarter earnings of $2.07 per share on revenues of $8.86 billion. Analysts polled by Refinitiv forecasted earnings per share of $1.93 on revenues of $8.52 billion.
Fidelity National Information Services — The financial products company's stock climbed 3.5% on the back of better-than-expected first-quarter results. Fidelity National earned an adjusted $1.29 per share on revenue of $3.51 billion. Analysts polled by StreetAccount expected a profit of $1.21 on revenue of $3.41 billion.
Southwest Airlines — The airline company's shares slipped 3.4% following a wider-than-expected loss for the first quarter. The carrier had a meltdown in the final days of December, when it canceled more than 16,000 flights in late December. The incident resulted in a $325 million revenue impact for the first quarter, Southwest said.
Check out the full list here.
— Hakyung Kim
Vehicle demand in China weighing on chip stocks
Semiconductor stocks are generally sitting out the market rally on Thursday, and some cautious commentary about the auto market could be the culprit, according to Adam Crisafulli of Vital Knowledge.
Mobileye Global, a software company that works on assisted and autonomous driving, slashed its outlook for the year on Thursday morning, citing a slowdown in China.
"There were a handful of weak semiconductor reports Wed night (including MXL and WOLF), but this quote from MBLY is spooking people the most – "The China electric vehicle market has been negatively impacted by meaningful pricing actions by a global EV OEM, reduction of government electric vehicle subsidies, and general economic weakness in the country," Crisafulli said in note on Thursday.
Shares of Mobileye were down 22% in midday trading. The VanEck Semiconductor ETF (SMH) was shuffling between gains and losses.
— Jesse Pound
Mobileye drops more than 20% after cutting guidance
Self-driving company Mobileye fell more than 23% after the company pulled back its expectations for full-year performance.
The company now expects 2023 revenue to finish between $2.065 billion and $2.114 billion. Mobileye also said to expect an operating loss for the year between $166 million and $195 million.
In January, Mobileye said to expect revenue between $2.192 billion and $2.282 billion. It also estimated a smaller operating loss of between $110 million to $160 million.
Management cited weakness in China's electric vehicle market as a driver of the chilled expectations.
— John Rosevear, Alex Harring
Merck, Caterpillar drops weigh on Dow
Though both beat Wall Street expectations, both were down as investors parsed management commentary and share prices. The two stocks were the worst performers in the 30-stock index, with Merck shedding around 1.5% and Caterpillar sliding just over 3.2%.
— Alex Harring
Meta, Comcast advances help communication service stocks lead S&P 500 up
The sector is up more than 4.5% Thursday, led up by advances of more than 14% and 6% from Meta and Comcast, respectively. Consumer discretionary, by comparison, was the second best performing sector with a relatively muted 1.5% gain.
Eight of the 11 sectors were trading up in what's so far been a winning day for the index. As of whole, the S&P 500 has gained around 0.8%. Health care and energy were the two worst performing sectors, with each dropping around 0.8%.
Disclaimer: Comcast owns NBCUniversal, the parent company of CNBC.
— Alex Harring
Electronic Arts could have trouble ahead after collapse of Microsoft takeover of Activision Blizzard, analyst says
Video game company Electronic Arts