NEW YORK (AP) โ Wall Street emerged from its hangover Thursday and U.S. stocks rebounded in a broad-based rally after their worst day since September.
The S&P 500 gained 1.2% to recover three-quarters of its sharp loss from the previous day. The Dow Jones Industrial Average rose 369 points, or 1%, while the Nasdaq Composite jumped 1.3%.
Big tech stocks led the way in a reversal similar to the previous day, when Alphabet and Microsoft sank despite reporting stronger earnings than analysts expected. Microsoft rose 1.6% a day after falling 2.7%. Google parent company Alphabet added 0.8% after falling 7.5%
Big tech stocks are the most influential on Wall Street because they are the biggest and face high expectations after soaring much higher than the rest of the market last year. Amazon, Apple and Metaplatforms They reported their latest results after trading ended on Thursday and faced similar pressure to deliver big numbers to justify their bull runs.
Meta Platforms, which owns Facebook and Instagram, was a star in after-hours trading. It rose after beating analysts' expectations for earnings and revenue and saying it would begin paying a dividend to shareholders.
Overall, stocks received a boost following a series of reports suggesting the economy remains strong while inflation pressures may be easing. These data could give the Federal Reserve more evidence he wants of a slowdown in inflation before making the interest rate cuts investors crave. A day earlier, stocks fell sharply after the Federal Reserve chairman warned that he doesn't have enough such evidence.
Merck rose 4.6% after the pharmaceutical giant posted higher profits and revenue in the latest quarter than analysts expected. Etsy jumped 9.1% after adding an Elliott Investment Management partner to its board, who said he sees an opportunity to significantly increase the company's value.
On the losing side of Wall Street, New York Community Bancorp fell another 11.1% after falling 37.7% the day before, when it reported a loss in its latest quarter and cut its dividend to strengthen its financial strength. The surprising report sent shares of other regional banks tumbling, reviving uncomfortable memories of last year's banking crisis that led to the collapse of Silicon Valley Bank, Signature Bank and others.
New York Community Bancorp had acquired much of Signature, and analysts say much of its difficulties are related to that. But its commercial real estate-related losses are a reminder of the challenges facing the entire industry. The KBW Nasdaq Regional Bank Index fell 2.3%, following Wednesday's 6% drop.
Peloton Interactive fell 24.3% after it gave a forecast of upcoming earnings that did not meet analysts' expectations. This was despite the fact that their forecasts for the last quarter were roughly in line.
In total, the S&P 500 rose 60.54 points to 4,906.19. The Dow Jones added 369.54 to 38,519.84 and the Nasdaq rallied 197.63 to 15,361.64.
In the bond market, the 10-year Treasury yield fell to 3.86% from 3.92% late Wednesday.
It sank after a report showed that slightly more workers applied for unemployment benefits last week than expected. While no one wants workers to lose their jobs, the number is still low relative to history. And Wall Street wants to see a cooling in the labor market, which could contain inflationary pressures.
A separate report offered similar encouragement for traders. He said American workers were much more productive in the last three months of 2023 than expected, producing more things per hour worked. Strong productivity growth could allow workers to earn larger wage increases without adding more pressure on inflation.
"If companies can deliver strong productivity growth, they will be able to control costs and protect margins without sacrificing talent in an environment of still high wages and fading pricing power," said EY chief economist , Gregory Daco.
Data released later in the morning suggested the U.S. manufacturing industry is improving after struggling for more than a year under the weight of high interest rates. Manufacturing activity contracted for the 15th straight month in January, but not as much as economists expected. The growth in new orders is helping to boost the industry, according to the Institute for Supply Management.
Potentially worrying, however, was that commodity prices rose in January after eight months of declines.
Traders are increasingly betting that the Federal Reserve will begin cutting interest rates in May, after pushing back expectations in March. When it begins, it would mark a sharp turnaround after the Federal Reserve raised its main interest rate to the highest level since 2001 in hopes of taming inflation.
High interest rates intentionally slow the economy and depress investment prices.
In overseas stock markets, London's FTSE 100 fell 0.1% after the Bank of England said maintaining your main interest rate at a maximum close to 16 years Inflation in Britain unexpectedly rose to 4%. in December.
Rates were mixed in Europe and Asia.
AP Business writers Matt Ott and Elaine Kurtenbach contributed.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
