Stock Market News for Feb 3, 2022
U.S. stock markets closed in positive territory in a row for fourth straight-day on Wednesday. Strong fourth-quarter 2021 earnings results boosted market participants’ confidence in risky assets like equities. All three major stock indexes ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.6% or 224.09 points to close at 35,629.33. Notably, 21 components of the 30-stock index ended in green while 9 in red. The tech-heavy Nasdaq Composite finished at 14,417.55, rising 0.5% due to strong performance by large-cap technology stocks.
Meanwhile, the S&P 500 advanced 0.9% to end at 4,589.38. Ten out of eleven sectors of the benchmark index closed in positive territory while one in red. The Communication Services Select Sector SPDR (XLC), the Utilities Select Sector SPDR (XLU), the Real Estate Select Sector SPDR (XLRE) and the Health Care Select Sector SPDR (XLV) rallied 2%, 1.5% 1.7% and 1.4%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 0.6% to 22.09. A total of 11.06 billion shares were traded on Wednesday, lower than the last 20-session average of 12.43 billion. The S&P 500 registered 27 new 52-week highs and two new 52-week low. The Nasdaq Composite posted 48 new 52-week highs and 67 new 52-week lows.
Q4 Earnings Drive Markets
As of Feb 2, 214 S&P 500 companies reported fourth-quarter 2021 results. Total earnings of these companies are up 31.9% year over year on 18% higher revenues with 79.4% beating EPS estimates and 78.5% surpassing revenue estimates. Total fourth-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to climb 25.6% from the same period last year on 14.1% higher revenues.
On Feb 1, after the closing bell, technology behemoth Alphabet Inc. GOOGL reported blockbuster earnings results. Quarterly earnings of $30.69 per share surpassed the Zacks Consensus Estimate by 14.9%. The figure rose 37.6% year over year and 9.6% sequentially. Revenues of $75.3 billion increased 32% year over year (33% at constant currency). The figure rose 15.7% from the prior quarter.
Advanced Micro Devices Inc. AMD reported fourth-quarter 2021 non-GAAP earnings of $0.92 per share, which surpassed the Zacks Consensus Estimate by 22.67%. The bottom line soared 77% year over year and 26% sequentially. Revenues of $4.83 billion outpaced the Zacks Consensus Estimate by 6.69% and surged 49% year over year. On a quarter-over-quarter basis, the top line grew 12%.
Consequently, shares of Alphabet and Advanced Micro Devices rallied 7.5% and 5.1%, respectively. Advanced Micro Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Automatic Data Processing Inc. ADP reported that private payrolls data dropped to 301,000 in January. Moreover, December’s data was revised downward from 807,000 reported earlier to 776,000. A major reason for disappointing private sector payrolls data in January was the rapid spread of the Omicron variant of coronavirus.
Service-providing industries cut 274,000 jobs while goods producers cut 27,000 jobs. Employment in small-sized businesses dropped 144,000. Mid-sized businesses declined 59,000 and large-sized businesses declined 98,000.
The pandemic-sensitive leisure and hospitality industry cut 154,000 jobs. Trade, transportation and utilities cut 62,000 jobs. Moreover, employment in Trade, transportation and utilities, other services, manufacturing, health care and construction declined by 62,000, 23,000, 21,000, 15,000 and 10,000.
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