Dow jumps 600 points, Nasdaq pops 3% as tech leads comeback rally
Stocks rallied Thursday, following a strong earnings report from Meta Platforms, as the market sought to recover from this month’s sell-off.
The tech-heavy Nasdaq Composite added 3.1%. The S&P 500 gained 2.5%. The Dow Jones Industrial Average rose about 620 points, or 1.9%.
Investors have weathered volatile trading sessions this week as stocks struggle for direction. The major averages staged a big intraday rally to close higher Monday, but stocks dropped Tuesday, leading to the Nasdaq’s worst day since 2020. Stocks attempted to rebound Wednesday, but pared gains late in the session with the Nasdaq closing flat at its low of 2022.
A slew of corporate earnings reports drove market sentiment Thursday, appearing to be a green light for investors to pick up beaten-down names.
“It’s been a pretty good earnings season and that is supportive for the equity market,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said.
Shares of Meta surged about 18% following a beat on earnings, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.
Qualcomm gained around 8% on the back of strong earnings, while PayPal rose roughly 11% despite issuing weak guidance for the second quarter.
Merck shares rose 5% and led gainers on the Dow after an earnings beat. McDonald’s, Eli Lilly and Southwest were all higher Thursday after their quarterly reports.
Apple and Amazon both rose more than 4% ahead of reporting earnings after the bell.
On the downside, Caterpillar fell about 2% despite an earnings beat. Teladoc plunged more than 41% after reporting weaker-than-expected results.
Thursday’s moves followed a volatile session Wednesday that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off.
Stocks have struggled this month amid concerns about slowing global growth, rising inflation and the Federal Reserve’s monetary tightening.
U.S. gross domestic product unexpectedly declined in the first quarter by 1.4% from the year prior, compared with the 1% growth expected by economists surveyed by Dow Jones.
Some investors brushed off the economic contraction, citing the jump in prices and trade deficit as contributing the most to the decline.
“Bottom line, blame the record high trade deficit for the contraction in real GDP, along with an 8% price deflator,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note.
The S&P 500 is down more than 5% for April — on pace for its biggest monthly decline since March 2020. The Nasdaq Composite has lost about 10% since the start of April and is headed for its worst one-month performance since October 2008. The Dow has been the relative outperformer, losing about 2% this month.