Market Updates
Mega-Cap Tech and Semiconductor Stocks Extend Market Rally
Barry Adams
19 Jan, 2024
New York City
Stocks gained in early trading on Friday as investors piled into mega-cap stocks.
A tech-powered rally on Thursday supported a broader advance as investors continue to believe that strong economic labor market conditions are helping the Federal Reserve engineer a soft landing while attempting to lower inflation to 2%.
The S&P 500 index and the Nasdaq Composite are set to wipe off losses in the year so far.
Stocks have been on an upswing since October 2023, and mega-cap tech and semiconductor stocks have led gains, but stocks in other sectors have lagged behind the market advance.
Investors are hoping that the market rally will broaden to include more sectors once the Federal Reserve pivots to lowering interest rates.
So far, investors have built expectations of as many as six interest rate cuts of 25 basis points in 2024, and if those expectations of rate cuts are not met, then market indexes are likely to face sharp headwinds.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 4,831.05, and the Nasdaq Composite rose 0.8% to 15,196.05.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes advanced to 4.13%, and 30-year Treasury bonds edged up to 4.36%.
WTI crude oil decreased $0.27 to $73.76 a barrel, and natural gas prices decreased 6 cents to $2.63 a thermal unit.
Gold increased by $11.35 to $2,033.87 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.33.
U.S. Stock Movers
Super Micro Computer soared 12% to $349.76 after the information technology company said strong demand for its rack-scale AI and total IT solutions is driving its sales and earnings ahead of its previous guidance.
Sales in the fiscal second quarter ending in December are likely to be in the range of $3.6 billion and $3.65 billion, ahead of its previous estimates of $2.7 billion and $2.9 billion.
GAAP diluted earnings per share are expected to be between $4.90 and $5.05, compared to its previous estimate of between $3.75 and $4.24.
iRobot Corporation plunged 37% to $14.81 after the European Union's antitrust agency is expected to block Amazon's purchase of the popular home vacuum cleaners.
The news was reported by the Wall Street Journal, citing unnamed officials at the agency.
Wendy's Company increased 0.7% to $19.40 after the fast food chain operator named PepsiCo executive as its next chief executive.
Kirk Tanner heads the North American beverage business of PepsiCo and has been with the company for more than three decades.
Meta Platform gained 1% to $380.0, and Nvidia jumped 1.8% to $581.30 after Meta's CEO, Mark Zuckerberg, said the company is spending billions of dollars to support its artificial intelligence efforts.
Zuckerberg, without elaborating on its purchase dollar volume, said that the company is planning to purchase 350,000 H100 graphics cards from Nvidia in the current year.
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