Daily Stock Market Update — Thursday, Jan. 31
Major stock indexes are mostly higher, placing the benchmark S&P 500 toward its best monthly gain since 2015 and more in Thursday’s Stock Market Update.
Gains in communications and health care companies offset losses in banks, technology stocks and elsewhere in the market.
Investors remained focused on corporate earnings, which have been mixed. Facebook jumped after reporting solid results for its fourth quarter, helping to lift the tech-heavy Nasdaq composite. General Electric soared after reporting growth in key segments. Microsoft and Visa fell.
Homebuilders surged following new data showing sales of new U.S. homes soared in November.
The market has made a sharp turnaround in January after the worst December since 1931, though concerns linger over trade and global economic growth. Some of those jitters were reflected in the bond market as demand for the safe-haven assets sent the price of U.S. Treasury notes higher.
Economic reports in Europe and China have been pointing to slower growth, and debate over Britain’s exit from the European Union continues with no resolution in sight.
Trade talks between the U.S. and China entered a second day Thursday. President Donald Trump voiced optimism before meeting with representatives from China, but noted there would be “no final deal” until he sits down with Chinese President Xi Jinping.
OVERSEAS STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 index rose 23 points, or 0.9 percent, to 2,704 at closing time. The Dow Jones Industrial Average fell 15 points, or 0.1 percent, to 24,999. The Nasdaq composite climbed 98 points, or 1.4 percent, to 7,281. The Russell 2000 index of smaller companies picked up 12 points, or 0.9 percent, to 1,499.
ANALYSTS VIEW: “Overall, we’re still encouraged that this earning season is comforting to people,” said Ryan Detrick, senior market strategist at LPL Financial.
Strong results and outlooks from big U.S. companies seem to be calming some of the broader recession fears, he said. Results from the financial sector earlier this month was particularly encouraging.
HOME SWEET HOME: Homebuilders climbed on new data showing sales of newly built homes soared in November. The Commerce Department said new home sales jumped 16.9 percent in November from the previous month. Despite the healthy gain, sales remain 7.7 percent below the pace from a year earlier. The report was delayed by the 35-day government shutdown. Meritage Homes led the pack, vaulting 9.8 percent to $44.94.
LIKE: Facebook beat Wall Street’s profit and revenue forecasts, despite an increase in spending on privacy and security. The stock gained 11.3 percent to $167.48.
The social media company has been plagued by privacy scandals and the threat of regulation, but those haven’t appreciably slowed its expansion. Its user base grew to 2.32 billion, up 9 percent from a year earlier and higher than analysts’ forecasts.
It’s a marked difference from last July, when the company warned of slowing revenue growth and suffered a 19 percent drop in value. That marked the worst drop in stock market history.
GENERAL ELECTRIC: The industrial conglomerate reported mixed results for the fourth quarter, but revenue and profit were still higher across most of its segments. The company has been cutting costs and spinning off units for years in a bid to boost its bottom line.
The stock climbed 12 percent to $10.19.
The company also reached a $1.5 billion settlement with the Department of Justice over its subprime mortgage business before the 2008 financial crisis.
MICROSOFT: The technology giant swung to a profit in its latest quarter profit, driven by revenue growth at its cloud-computing platform. The results beat forecasts, but the company’s key personal computing segment fell short of forecasts. The stock fell 2.2 percent to $104.06.
The company is trying to rival Amazon as a cloud-computing provider with its Azure platform. That platform saw 76 percent revenue growth during the most recent quarter.
US-CHINA TRADE: Trade talks continue Thursday between the U.S. and China. The high-level talks are aimed at settling a months’ long trade war that has raised fears of slower economic growth. Industrial and technology companies have warned about slowing sales because of the trade impasse.
EUROPEAN GROWTH: Investor sentiment was hit in Europe after official data showed the 19-country eurozone economy grew only 0.2 percent in the fourth quarter from the previous three-month period. Italy fell into recession, darkening the outlook for the country, where the populist government has been in a dispute with EU officials over its spending plans.
OVERSEAS STOCK MARKET UPDATE: Germany’s DAX fell 0.1 percent. The CAC 40 in France rose 0.4 percent. Britain’s FTSE 100 gained 0.4 percent. Japan’s Nikkei 225 index gained 1.1 percent. The Hang Seng in Hong Kong climbed 1.1 percent.
BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 2.62 percent from 2.69 percent late Wednesday.
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