Alphabet surge spells gains for Wall Street

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  • 2021-02-04 HKT 06:04″ title=”Wall Street’s gains were tempered by a fall in Amazon’s stock. File photo: Reuters”>


    Wall Street's gains were tempered by a fall in Amazon's stock. File photo: Reuters
    Wall Street’s gains were tempered by a fall in Amazon’s stock. File photo: Reuters

The Dow and S&P 500 rose slightly on Wednesday, registering a third straight session of gains, with Alphabet’s shares hitting a record high following its strong quarterly results.

Alphabet shares ended up 7.3 percent and provided the biggest boost to the S&P 500. The Google parent late on Tuesday posted results that topped quarterly sales expectations for its advertising and cloud businesses, helped in part by the pandemic.

With recent stronger-than-expected results from Alphabet and other companies, S&P 500 companies are now on track to post earnings growth for the fourth quarter of 2020 and to defy expectations for another quarterly profit drop due to the pandemic, based on data from Refinitiv on Wednesday.

The Cboe Volatility index was down, and wild swings in stock prices of GameStop and other social media favourites subsided following a recent trading frenzy. GameStop shares ended the day up just 2.7 percent.

“The broad tape continues to be strong,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

The recent retail trading activity is likely “to be here for a while,” said O’Rourke. “I don’t know if it’s going to be here with the same intensity … It’s hard to maintain that type of intensity. What we’ll probably see are coordinated movements in individual names by that crowd.”

Weighing on the Nasdaq and limiting gains in the broader market, Amazon shares eased 2 percent as Jeff Bezos’ surprise move to step down as chief executive quashed optimism about bumper quarterly results. However, analysts were upbeat on the promotion of its cloud computing head to the top job.

The Dow Jones Industrial Average rose 0.12 percent, to 30,724, the S&P 500 gained 0.10 percent, to 3,830 and the Nasdaq Composite dropped 0.02 percent, to 13,611.

On the economic front, the ADP Report showed hiring by US private employers rebounded by 174,000 in January after a drop in December. A more comprehensive jobs report is expected on Friday. (Reuters)