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- US stocks surged on Wednesday, continuing to rebound from their January sell-off as tech earnings impressed investors.
- Shares of Alphabet and Advanced Micro Devices surged about 10% after better-than-expected reports.
- Private employment data from ADP showed a loss of 301,000 jobs in January due to Omicron.
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The Nasdaq 100 led a surge in US stocks Wednesday, as mega-cap tech earnings continued to impress investors.
This time it was Alphabet and Advanced Micro Devices that beat earnings results and experienced a 10% surge in their respective stock prices. Alphabet also announced a 20-for-1 stock split that surprised investors, while AMD pointed to continued strong demand in its data center business.
The jump higher on Wednesday comes as stocks continue to recover from their January sell-off, in which the S&P 500 briefly tumbled about 10%. But there could be more volatility ahead, as US private jobs data from ADP showed a loss of 301,000 jobs in January due to the spread of Omicron. Economists had expected a gain of 180,000 jobs.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Wednesday:
- S&P 500: 4,572.35, up 0.57%
- Dow Jones Industrial Average: 35,446.74, up 0.12% (41.50 points)
- Nasdaq Composite: 14,497.06, up 1.05%
In contrast to Alphabet and AMD, not all tech results were positive. PayPal plunged 19% after it lowered its growth outlook and recalibrated the metrics it will use going forward to measure its growth. That was a surprise to both investors and analysts. PayPal’s Wednesday slump was on track to be its worst daily decline ever since it went public in 2015.
Starbucks was another company that disappointed investors with its earnings results, with the stock down about 5% in early Wednesday trades after the company said rising costs hit profits.
Of the 38% of S&P 500 companies that have reported earnings so far, 79% are beating profit estimates by a median of 7%, while 75% are beating revenue estimates by a median of 4%, according to data from Fundstrat.
Hedge funder Ray Dalio thinks the volatility in the stock market will continue because investors are underestimating inflation and what the Federal Reserve will do in terms of raising interest rates and reducing its balance sheet.
On the cryptocurrency front, Jack Dorsey told MicroStrategy’s Michael Saylor that Facebook should have focused on bitcoin instead of wasting time on diem.
West Texas Intermediate crude oil rose as much as 0.52% to $88.66 per barrel. Brent crude, oil’s international benchmark, jumped as much as 0.47% to $89.58 per barrel.
Gold rose as much as 0.11% to $1,803.50 per ounce. The yield on the 10-year Treasury was flat at 1.79%.