[New York Stock Market] Rise on Big Tech Earnings... Nasdaq Up 3.06%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed higher on the 28th (local time), buoyed by strong earnings from big tech companies including Meta, despite news that first-quarter gross domestic product (GDP) growth slowed.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,916.39, up 614.46 points (1.85%) from the previous session. The large-cap focused S&P 500 index rose 103.54 points (2.47%) to 4,287.50, and the tech-heavy Nasdaq index ended the day at 12,871.53, up 382.60 points (3.06%).

Investors closely watched key indicators released that day, including the U.S. first-quarter economic growth rate, corporate quarterly earnings, and movements in Treasury yields.

Meta Platforms, the parent company of Facebook, which reported earnings after the previous day's close, surged 17.59% after its quarterly net profit exceeded expectations. Qualcomm's stock also jumped more than 9% on strong earnings. PayPal closed up 11.48% despite a modest second-quarter guidance. Twitter's stock rose 0.97%. Apple and Amazon ended the regular session up 4.52% and 4.65%, respectively, ahead of their earnings reports scheduled immediately after market close.

This upward trend is seen as confirming investors' relief regarding tech stocks' earnings, which had been sliding due to recent disappointing forecasts from companies like Netflix. Victoria Fernandez, Chief Market Strategist at Crossmark Global Investments, said, "It's a very good earnings season," adding that it "is supporting the stock market."

Global pharmaceutical company Merck's stock surged nearly 5% after reporting earnings that beat expectations, driven by strong sales of its COVID-19 treatment. Eli Lilly also rose more than 4%. McDonald's and Southwest Airlines saw their shares increase 2.85% and 2.09%, respectively, as their first-quarter earnings exceeded forecasts.

On the other hand, Caterpillar slightly declined despite strong earnings. Teladoc plunged over 40% after releasing earnings below market expectations.

However, despite this rally, CNBC reported that the three major New York stock indices are expected to close April in the red. Since the beginning of the month, the Nasdaq has fallen 9%, the S&P 500 5.3%, and the Dow 2.2%. CNBC noted, "This month's market struggled due to concerns over global growth slowdown, inflation, and Federal Reserve tightening."

The preliminary U.S. first-quarter GDP growth rate released that day recorded an annualized decline of -1.4%. This is the first time the U.S. quarterly growth rate has been negative since the early stages of the COVID-19 pandemic in the first and second quarters of 2020. It also significantly missed the market forecast of 1.0%. The previous quarter, Q4 2022, saw 6.9% growth.

However, this figure is expected to rebound in the second quarter due to the impact of the trade deficit. U.S. President Joe Biden dismissed concerns about a recession, stating, "I am not worried about a recession," and attributed the first-quarter contraction to technical factors.

Accordingly, Treasury yields rose as the market absorbed the unexpected negative growth rate. The benchmark 10-year U.S. Treasury yield briefly surged to the 2.88% range during the session and is currently hovering around 2.85%. The 2-year yield, sensitive to monetary policy, also rose, trading near 2.64%.

John Ro, Head of Multi-Asset Funds at Legal & General Investment Management, said, "It is a period of particularly high fundamental uncertainty," highlighting that volatility in the bond market is especially elevated.

The U.S. weekly initial jobless claims released that day fell by 5,000 from the previous week to 180,000, in line with expectations. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," dropped more than 5% from the previous day, falling below the 30 level.

Oil prices rose after reports that Germany would not oppose the European Union's (EU) ban on Russian oil imports. At the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil closed at $105.36 per barrel, up $3.34 (3.3%) from the previous session.

That day, the Wall Street Journal (WSJ), citing sources, reported that Germany no longer opposes the EU's full ban on Russian oil imports if more time is given to find alternative suppliers. As a result, it is anticipated that the EU could make a related decision as early as next week.

This content was produced with the assistance of AI translation services.