Wall St ends sharply for the second day; Amazon.com, Apple jump after hours

  • The US economy contracted in the second quarter
  • Meta Platforms revenue drops for the first time
  • Ford stock gains after the results
  • Indices: Dow Jones rose 1%, Standard & Poor’s 500 rose 1.2%, Nasdaq rose 1.1%.

NEW YORK (Reuters) – U.S. stocks rebounded on Thursday for a second day in a row, with all three major indexes ending more than 1%, as data showed that the second consecutive quarterly contraction in the economy fueled investor expectations that the Federal Reserve may not need it. Being aggressive in raising interest rates as some feared.

The yield on the benchmark 10-year Treasuries slipped after the data, while utilities (.SPLRCU) and real estate (.SPLRCU).

Mona Mahajan, chief investment analyst at Edward Jones, said the dip in yields could signal “that markets believe the Fed will have to turn rates into a pivot point and move them lower at some point, possibly in the next 12 months.”

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“This means that the pace of tightening will become more gradual in the future.”

In addition, growth expectations for second-quarter earnings rose this week as more S&P 500 companies reported results and beat analyst expectations. Among them, Ford Motor Co. (FN) shares jumped 6.1% after it reported better-than-expected quarterly net income. Read more

After the closing bell, Amazon.com shares rose more than 12% as the online retailer reported quarterly sales that beat Wall Street estimates. Amazon.com finished the regular session 1.1% higher. Read more Apple (AAPL.O) shares rose more than 3% hours after the company’s quarterly report and upbeat expectations, and the S&P 500 e-mini index lagged 2%. Read more

Early in the day, the US Commerce Department said the US economy unexpectedly contracted in the second quarter – the second consecutive quarterly drop in gross domestic product announced by the government. Read more

The news raised the possibility that the economy may be on the cusp of a recession, and some investors said it could prevent the Federal Reserve from continuing to raise interest rates significantly while battling high inflation.

The Dow Jones Industrial Average rose 332.04 points, or 1.03%, to 32529.63, the Standard & Poor’s 500 Index increased 48.82 points, or 1.21%, to 4,072.43 points, and the Nasdaq Composite Index increased 130.17 points, or 1.08 points. %, to 12162.59.

The Nasdaq posted its biggest percentage gain in two days since May 27.

Stocks rose in the previous session when the Federal Reserve raised interest rates, and comments from Federal Reserve Chair Jerome Powell eased some concerns about the pace of rate hikes. Read more

said Alan Lynch, president of Alan B. Inc., an investment advisory firm based in Toledo, Ohio.

On Wednesday, the Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point. The move followed a 75 basis point hike last month and smaller moves in May and March, in an effort by the US central bank to curb spiraling inflation.

Investors have expressed concern that inflation and steep hikes in the Federal Reserve may at some point push the economy into a recession. Read more

Among the decliners, Facebook and Instagram’s Meta Platforms Inc (META.O) tumbled 5.2% after reporting its first quarterly decline in revenue. Read more

Volume on US exchanges was 11.21 billion shares, compared to an average of 10.86 billion shares for the full session over the last 20 trading days.

Advance issues outnumbered declining issues on the New York Stock Exchange by 3.56 to 1; On the Nasdaq, the ratio was 1.66 to 1 favoring heights.

The S&P 500 posted three new 52-week highs and 31 new lows; Nasdaq Composite recorded 67 new highs and 97 new lows.

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Reporting by Caroline Valitkevich. Editing by Jonathan Otis

Our Standards: Thomson Reuters Trust Principles.

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