S&P 500 and Nasdaq 100 Traded at New Record Highs

Barry Adams
24 Jan, 2024
New York City

Benchmark indexes advanced on Wall Street after tech stocks powered ahead. 

The S&P 500 index and the Nasdaq Composite advanced more than 0.7% in Wednesday's trading after Netflix reported more-than-expected net subscriber additions.

Mega-cap tech stocks Alphabet, Apple, Amazon, Meta, Microsoft, and Netflix advanced, and the S&P 500 index and the Nasdaq Composite traded at new record highs. 

Dupont de Nemours plunged 12.5% to $65.34 after the chemical company reported weak fourth-quarter results and issued a weak outlook for the current quarter.

eBay increased 3.8% to $43.0 after the online marketplace operator announced its plan to lay off 9% of its workforce, or about 1,000 jobs, over the next several months.

After the close, Tesla, IBM, and Las Vegas Sands are scheduled to report quarterly results. 

Crude oil traded volatile in international markets, and shipping companies continue to avoid Red Sea Lanes amid ongoing Houthi rebel attacks in the region.

The Houthi attacks are impacting India's petroleum product shipments; about 25% of all fuel exports are destined for Europe via the Red Sea lanes.

Shipping companies have rerouted most of the container ships from the region along the coast of South Africa, increasing cost and shipping time.

The container ship rate from Shanghai to Rotterdam surged more than 80% from a year ago at the end of the last week to $3,777 per 40-foot container.

The average composite index for the year-to-date is $3,173 for a 40-foot container, $495 higher than the 10-year average rate of $2,678, according to Drewry's World Container Index.

 

U.S. Indexes and Yields

The S&P 500 index increased 0.7% to 4,896.23, and the Nasdaq Composite rose 1.1% to 15,599.39.

The yield on 2-year Treasury notes decreased to 4.31%. 10-year Treasury notes declined to 4.10%, and 30-year Treasury bonds edged down to 4.30%.

WTI crude oil increased $0.63 to $75.0 a barrel, and natural gas prices increased 15 cents to $2.60 a thermal unit.

Gold decreased by $13.77 to $2,015.22 an ounce and extended this week's gains after the U.S. dollar drifted slightly lower in international trading.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.97.

 

U.S. Stock Movers

Texas Instruments declined 3% to $168.90 after the company estimated weaker-than-expected revenue and earnings in the first quarter.

The technology company estimated revenue in a range of $3.45 billion to $3.75 billion and earnings per share between 96 cents and $1.16.

Revenue in the fourth quarter declined 13% to $4.0 billion from $4.7 billion, net income plunged 30% to $1.4 billion from $1.97 billion, and diluted earnings per share fell to $1.49 from $2.13 a year ago.

Netflix soared 10.2% to $542.25 after the streaming service provider reported higher-than-expected quarterly revenue and earnings.

Moreover, the company added 13.1 million net new subscribers, increasing the total to 260.8 million paid subscribers, an all-time high.

Revenue in the fourth quarter increased 12.5% to $8.8 billion from $8.5 billion, net income advanced to $938 million from $55 million, and diluted earnings per share rose to $3.73 from 12 cents a year ago.

The company guided a first-quarter revenue increase of 13.2% to $9.2 billion, net income of $1.97 billion, and diluted earnings per share of $4.49.

Alibaba Group Holding gained 2.2% to $75.63 after company insiders acquired additional stakes in the China-based e-commerce giant.

Chairman Joe Tsai acquired $151 million of its U.S.-listed shares in the last quarter, according to a SEC filing on January 22.

Co-founder Jack Ma acquired $50 million of the company's Hong Kong-listed stock, according to leading stock brokers in Hong Kong.

The news about the insider's purchase was first reported by the New York Times.

AT&T Inc. declined 3.2% to $16.62 after the telecom company reported weaker-than-expected quarterly results.

 

 

 

European Markets Edged Higher, Eurozone Business Activities Fall 

European markets advanced after investors digested a fresh batch of corporate earnings, the business activities report, and Beijing's latest stimulus measures.

Market indexes in Paris, London, and Frankfurt gained in cautious trading amid a flood of corporate earnings reports.

The semiconductor equipment maker ASML reported a higher-than-expected fourth quarter report, SAP estimated a double-digit increase in its cloud computing segment, and Siemens Energy's preliminary quarterly results were ahead of market expectations.

French train maker Alstom reported new orders that exceeded market expectations, but the company missed its quarterly sales outlook.

 

Private Sector Activities Remain Subdued in the Eurozone

On the economic front, eurozone business activities continued to decline at the beginning of the year, S&P Global reported in its monthly survey on Wednesday.

The HCOB Eurozone PMI Composite Index edged slightly higher to 47.9 in January from 47.6 in December.

The latest data suggested that business activities in the currency zone dropped for the eighth month in a row, but at the slowest pace since last July.

The pace of new incoming orders continued to decline, and the fall in export order growth eased to the slowest pace in nine months, with order backlogs falling sharply.

However, the German private sector contracted at a faster pace in January amid ongoing broad weakness.

The HCOB German PMI Composite Index decreased to 47.1 in January from 47.4 in December.

On the other hand, the UK's private sector activity gained momentum in January, and the S&P Global UK Composite PMI rose to 52.5 in January from 52.1 in December.

 

Europe Indexes and Yields

The DAX index increased 1.6% to 16,889.92, the CAC-40 index rose 0.9% to 7,455.62, and the FTSE 100 index inched higher by 0.5% to 7,527.67.

The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.86%.

The euro edged lower to $1.090, the British pound inched higher to $1.276, and the U.S. dollar gained to 86.52 Swiss cents.

Brent crude increased $0.42 to $79.97 a barrel, and the Dutch TTF natural gas increased by €1.73 to €28.93 per MWh.

 

Europe Stock Movers

Alstom SA decreased 5.5% to €11.27 after the French train and mobility solutions provider reported weaker-than-expected fiscal third quarter sales.

SAP SE soared 6% to €158.28 after the German information system company reported fourth-quarter results.

Revenue in the fourth quarter rose 5% to €8.5 billion from €8.0 billion, net profit soared to 1.2 billion from 326 million, and diluted earnings per share rose to €1.01 from 46 cents a year ago.

The company estimated 2024 cloud segment revenue between €17.0 billion and €17.3 billion, an increase between 24% and 27% in constant currencies.

The company said its restructuring, which will involve about 8,000 employees, is likely to cost €2 billion in 2024.

Fresnillo Plc advanced 5.5% to 505.0 pence after the precious metal mining company said silver production rose in 2023.

Siemens Energy increased 7.5% to €13.35 after the company reported better-than-expected fiscal first quarter results.

Tullow Oil advanced 5.1% to 31.74 pence after the company said its 2023 energy production is expected to exceed its previous estimate.

ASML Holding increased 6.3% to €751.80 after the Dutch semiconductor equipment maker reported fourth-quarter earnings ahead of market expectations.

Revenue in the quarter ending in December increased to €7.2 billion from €6.4 billion, net income advanced to €2.0 billion from €1.8 billion, and diluted earnings per share rose to €5.20 from €4.60 a year ago.

 

Asian Markets Diverge, PoB Cuts RRR

Markets in Asia lacked momentum, and investors focused on local economic data and corporate earnings.

Crude oil traded volatile in international markets, and shipping companies continue to avoid Red Sea Lanes amid ongoing Houthi rebel attacks in the region.

The Houthi attacks are impacting India's petroleum product shipments; about 25% of all fuel exports are destined for Europe via the Red Sea lanes.

Shipping companies have rerouted most of the container ships from the region along the coast of South Africa, increasing cost and shipping time.

The container ship rate from Shanghai to Rotterdam surged more than 80% from a year ago at the end of the last week to $3,777 per 40-foot container.

The average composite index for the year-to-date is $3,173 for a 40-foot container, $495 higher than the 10-year average rate of $2,678, according to Drewry's World Container Index.

 

Japan Record Third Consecutive Annual Trade Deficit

The Nikkei index decreased 0.8% to 36,221.68 after Japan unexpectedly swung to a trade surplus in December.

Japan's exports rose 9.8% to a new record high of 9.64 trillion yen, and imports fell 6.8% to 9.58 trillion yen, the Ministry of Finance reported Wednesday.

In 2023, exports rose 2.8% to 100.89 trillion yen and imports contracted 7% to 110.18 trillion yen, resulting in a trade deficit of 9.29 trillion yen.

Japan reported a trade deficit for the third year in a row after energy prices soared and exports struggled with weakening global demand.

 

China Injects Liquidity

The People's Bank of China lowered its bank reserve requirement ratio, or RRR, by 50 basis points to support flagging financial markets and inject liquidity into the financial system.

The central bank lowered its reserve requirement for the first time after cutting it by 25 basis points in September, and the latest cut is expected to add about 1 trillion yuan, or $140 billion, to the financial system.

 

China Offers Verbal Support to Stabilize Financial Markets

Stocks in China advanced for the second day in a row, and Chinese securities regulators pledged more support to stabilize financial markets.

We are going to put all our efforts into "maintaining the stable operation of the capital market," China Securities Regulatory Commission chairman Yi Huiman said during a meeting on Tuesday, according to the government-controlled Securities Times.

The CSI 300 index added 0.9% to 3,261.97, and the Hang Seng Index advanced 1.6% to 15,606.62.

Alibaba Group soared 5.5% to HK$71.35 after Chairman Joe Tsai acquired $151 million of its U.S.-listed shares in the last quarter, according to a SEC filing on January 22.

Co-founder Jack Ma acquired $50 million of the company's Hong Kong-listed stock, according to leading stock brokers in Hong Kong.

 

India Stocks Rebound, Foreign Investors Lighten Holdings

Stocks lacked direction in early trading, and investors reacted to domestic earnings amid heightened geopolitical tensions in the Middle East.

The Sensex and the Nifty indexes struggled to stay in the positive zone, and banks were in focus after foreign investors lightened holdings in the sector.

Foreign investors have stepped up their selling of stocks in India because of the high valuation and rising U.S. bond yields.

In the last five trading sessions, foreign investors have sold about ₹28,000 crore, or $3.2 billion worth of stocks, according to data available from the exchanges.

The Sensex index decreased 53.25 points to 70,322.71, and the Nifty index fell 14.60 points to 21,224.20.

On the Mumbai stock exchange, 105 stocks traded at their 52-week highs and 21 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee edged lower to ₹83.14 against the U.S. dollar.