The S&P 500 rose slightly on Wednesday, rising for the third straight year as investors digested a wave of corporate earnings.
The broad equity benchmark rose 0.1% to 3,830.17, supported by energy and communications services. The Dow Jones Industrial Average rose 36.12 points, or 0.1%, to 30,723.60. The tech-heavy Nasdaq Composite fell less than 0.1% to 13,610.54 as Amazon stocks fell less than 0.1%.
Google’s parent alphabet stocks rose 7.3% after the tech giant posted 23% revenue growth and beat earnings estimates on the back of a rebounding advertising business from Google.
Amazon reported profits that nearly doubled Wall Street’s estimates, while it had its largest revenue ever at $ 125.56 billion, breaking the symbolic $ 100 billion mark for the first time. The e-commerce director also announced that Jeff Bezos is stepping down as CEO. Amazon’s stock fell 2%.
Amgen fell 1.4% after the biotech company released a weaker-than-expected full-year outlook, noting that the pandemic would continue to hurt sales. Amgen was the biggest loser in the blue chip Dow.
Investors welcomed a rebound in US employment last month. A report by contract processing company ADP on Wednesday showed that private companies created 174,000 jobs in January, above the Dow Jones estimate of 50,000.
“Beneath the surface, an economy is regaining momentum,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. “Coupled with outstanding earnings reports from big tech names this week, plus a revived vaccine surge and COVID cases in the US, the overall picture is positive.”
Wall Street saw one strong rally in a row as the Reddit-fueled retail frenzy subsided and restored investor confidence in the broader market. The 30-share Dow is up 2.5% this week after posting its best day since November on Tuesday. The S&P 500 is up more than 3% this week while the Nasdaq is up more than 4%.
“Brief squeeze fears are subsiding and the contagion has been contained for now,” said Maneesh Deshpande, head of equity derivatives strategy at Barclays, in a note. “Despite the relatively strong breakout of these names, the affected subset of affected short squeeze stocks is still a negligible part of the US equity market overall.”
After a meteoric, if seemingly synthetic, surge in GameStop over the past week from a brief press, stocks have seen more than 70% crater this week. Other Reddit trades have also returned to Earth due to trading restrictions imposed by major brokers. GameStop hovered between gains and losses in volatile trading on Wednesday, ending the session 2.7%.
Investors are also overseeing negotiations in Washington on another stimulus package. President Joe Biden met with 10 Republican senators on Monday to discuss an alternative, smaller proposal for aid to his $ 1.9 trillion package.
The winning season continues on Wednesday. The chip manufacturers Qualcomm, eBay, PayPal and Yum China report after the closing bell.
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