The S&P 500 hit a new closing high, as investors analyzed another batch of earnings reports and new labor market data.
The broad index hovered near the flat line for much of the day, but traded up 0.3% to 4,549.78 by 4 p.m. ET, its seventh consecutive rise. The technology-focused Nasdaq Composite Index rose 0.6%.
The Dow Jones Industrial Average, which also came close to a record Wednesday, fell less than 0.1%. International Business Machines actions,
a Dow component, fell 9.6%. The company reported lower revenue than analysts expected in the last quarter.
“The craziest thing in what I see in the markets is just an absolute standoff between growth and value investing,” said Jeff Powell, Managing Partner and Chief Investment Officer at Polaris Wealth Advisory Group. “I haven’t seen a market like this for a very long time.”
Stocks have risen in recent days, after strong earnings helped ease concerns that drove markets lower in early fall. Among those concerns: a slowdown in the Chinese economy, supply chain bottlenecks that have hampered sectors such as manufacturing and inflationary pressures.
Data showed jobless claims fell to a new pandemic low last week, a sign that layoffs remain rare. Initial jobless claims fell to 290,000 from 296,000 the week before, the Labor Department said. Meanwhile, sales of existing homes rebounded in September, up 7% from the previous month.
Shared office firm WeWork began trading publicly on Thursday, two years after its planned initial public offering imploded. The company goes public through a combination with BowX Acquisition Corp., a special purpose acquisition company. Shares rose about 14%.
The third quarter results are being watched closely by investors. They could provide a clearer picture of the pandemic recovery than the previous two quarters.
“Coming out of the depressed times of Covid and turning it all around you had this amazing year-over-year comparison that was really easy to pull off,” said Kevin Philip, Managing Director of Bel Air Investment Advisors . “Now the question for a lot of people is… will the earnings after this big jump be sustained? “
The earnings reports will provide clues to consumers’ spending habits. “I wouldn’t bet against the American consumer,” Mr. Philip said. “It’s a terrible bet.”
AT&T shares fell 0.6% after the company said it expected annual profits to hit the top of its target. Blackstone shares gained 3% on net profit which nearly doubled in the third quarter.
Of the 80 S&P 500 companies to report until Wednesday, 81% had beaten analysts’ earnings forecasts, according to FactSet, better than the roughly 75% who did so quarterly in 2019.
“We’ve been through a period of hesitation that has brought a bit of volatility, but I think stocks will continue to rise,” said Paul Jackson, head of asset allocation research at Invesco. He expects households to continue spending the savings accumulated during the pandemic.
HP raised its dividend and outlook for fiscal 2022, and stocks jumped 6.9%. Tesla added 3.3% after the automaker said Wednesday night it had posted a third consecutive record quarterly profit.
Overseas markets were generally down. China Evergrande Group shares fell 13% in Hong Kong after the struggling developer called off plans to sell a controlling stake in its property management unit, a setback in attempts to ease its lingering cash flow crisis.
Hong Kong’s Hang Seng Index fell 0.5%, Japan’s Nikkei 225 fell 1.9%, and China’s Shanghai Composite Index rose 0.2%.
The pan-continental Stoxx Europe 600 index fell 0.1%, dragged down by stocks in the basic resource, autos and industrials sectors. Miners Anglo American and BHP Group were both down and copper prices retreated from recent highs.
In the bond market, the benchmark 10-year T-bill yield edged up to 1.674%, the largest gain in about three weeks. Bond yields and prices move in opposite directions.
Brent crude, the international benchmark for oil, fell $ 1.21 a barrel, or 1.4%, to $ 84.61, but remains at the fourth-highest settlement value this year.
The Turkish lira has fallen. Turkey’s central bank cut its key rate to 16% from 18%, a larger drop than investors expected.
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