The Nasdaq and S&P 500 held gains at midday Thursday, but small caps faded as the stock market continued a pattern of volatile trading.
The Nasdaq composite trimmed its gain to 0.8%, while the S&P 500 was up 1.2%. The Dow Jones Industrial Average rose 1.4%. Small caps, however, made a fast retreat and a gain that topped 1% early today went to a drop of 0.3%.
Volume rose on the Nasdaq and the NYSE compared with the same time on Wednesday.
The stock market's volatility in the new year was in full display Wednesday, when indexes fluctuated widely before and after the Fed announced its latest monetary policy. The Fed set the stage for an interest-rate increase in March. It plans to end bond purchases by then, capping emergency measures put in place for the Covid-19 crisis. Today, the market seemed at ease with the move.
Tech Earnings Mixed
Tech-sector earnings reports were mixed.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34635.84 | +467.75 | +1.37 |
| S&P 500 | (0S&P5) | 4400.49 | +50.56 | +1.16 |
| Nasdaq | (0NDQC ) | 13645.63 | +103.51 | +0.76 |
| Russell 2000 | 195.38 | -0.59 | -0.30 | |
| IBD 50 | 37.25 | +0.02 | +0.05 | |
Last Update: 11:54 AM ET 1/27/2022 |
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Seagate Technology soared 14% after the memory drive maker beat earnings expectations and gave a bullish outlook. The stock is again testing resistance around 117 and regained its 50-day moving average.
ServiceNow gapped up 12% after the cloud software company beat Q4 profit and sales expectations. Piper Sandler upgraded the stock to overweight from neutral following the report.
Tesla reported better than expected fourth-quarter earnings late Wednesday, but the electric-vehicle maker said supply-chain issues continue to hinder production. The stock fell more than 5% Thursday at midday, deepening a downward trend.
Silicon Motion Technology fell below its 50-day moving average after the chipmaker's guidance for the current quarter was light. The midpoint of its revenue forecast is $231.5 million this quarter, short of Wall Street analyst estimates for $245.7 million.
For the full year, Silicon Motion forecast sales of $1.11 billion to $1.2 billion. Analysts were expecting $1.08 billion in 2022 sales. The stock erased an 18% gain from its 81.97 buy point, which is a sell signal.
Chip-equipment maker Lam Research late Wednesday beat earnings expectations for its December-ended quarter, but sales missed estimates and the company's guidance for the current quarter was soft. Shares fell to a three-month low.
After today's close, Apple will announce results for its December-ended quarter. Analysts expect earnings of $1.90 a share and sales of $119 billion. The stock was up 2% midday Thursday, trying to end a seven-day losing streak.
Stock Market Mulls Economic News
The U.S. economy grew 6.9% in the fourth quarter, the U.S. Commerce Department reported early today. The growth exceeded the 5.7% increase in Econoday's consensus of economist forecasts, and it marked a sharp acceleration from the 2.3% increase in GDP in the third quarter. The improvement came despite a surge in the omicron variant throughout the economy in December.
Sal Guatieri, Senior Economist at BMO Capital Markets, said much of the fourth-quarter's surge reflected a rebound in business inventories. "Despite ongoing chip shortages, auto dealers managed to partly restock their lots, which flags firmer sales and production ahead," he said in a report.
"While omicron will lead to weaker growth in the first quarter, activity is expected to rebound nicely once the latest pandemic wave abates and supply-chain glitches ease," Guatieri added. "The Fed will need to be 'humble and nimble' as it navigates underlying economic strength, worsening labor shortages, and stubbornly high inflation."
For the whole 2021, the U.S. economy grew 5.7%, a big improvement from the 3.4% contraction in 2020, and it marked the best year since 1984.
Pending Home Sales Fall Sharply
At 10 a.m. ET, the December report of pending home sales came in much weaker than expected. Pending sales slid 3.8%, well below the Econoday consensus for a 0.6% increase. SPDR S&P Homebuilders ETF reduced most of the day's gain to only 0.5%.
Initial jobless claims fell to 260,000 last week, from 290,000 the prior week. The latest figure came in lower than the 265,000 claims economists expected.
But durable goods orders fell 0.9% in December. It was a considerable change from the revised 3.2% increase in November, and a steeper drop than the 0.5% decline in the Econoday forecast. Excluding transportation, orders climbed 0.4%, in line with views.
