U.S. stock-market indexes rallied on Thursday, led by a surge in shares of Facebook Inc., following better-than-expected earnings, which helped boost the broader technology sector.
What are markets doing?
The Nasdaq Composite Index COMP, +1.54% rose 93 points, or 1.3%, to 7,097, outperforming other benchmarks in early trade. Solid earnings from technology companies helped lift the index.
The S&P 500 SPX, +0.93% added 18 points, or 0.7%, to 2,657, with the technology sector up 2.2%. Only industrials, financials and telecommunications shares were decisively in the red.
The Dow Jones Industrial Average DJIA, +0.97% was up 150 points, or 0.6%, to 24,230, with gains in the shares of Visa Inc. and Home Depot Inc., leading the way higher for blue chips.
What is driving the market?
Traders focused on the latest run of earnings from major tech companies, which managed to instill some confidence in the earnings season. So far this season, more than 80% S&P 500 companies have beaten forecasts, but the better-than-expected results have often failed to lift the companies’ share prices.
Meanwhile, investors appeared to push aside concerns over rapidly rising U.S. interest rates, as the yield on 10-year Treasury notes TMUBMUSD10Y, -1.11% retreated from the psychologically important 3% level.
Some attention was focused on the prospect of the U.S. reimposing sanctions on Iran, despite French President Emmanuel Macron’s efforts at brokering a new deal between Washington and Iran. But investors remain circumspect about the possibility of fresh sanctions, analysts say.
Which stocks are in focus?
Shares of Chipotle Mexican Grill Inc.’s shares CMG, +23.04% rallied by 20% after analysts at several investment banks raised their price targets following earnings reports on Wednesday.
On a downbeat note, eBay Inc.‘s shares EBAY, -6.27% fell over 5.9% after the online marketplace provided a downbeat outlook in its earnings out late Wednesday. Payments processor PayPal Holdings Inc.’s stock PYPL, +3.41% PYPL, +3.41% rose 4% after its results.
What are strategists saying?
“This is an environment when not every stock gets a participation trophy, but only the ones that can show solid revenue growth and positive guidance,” said Karyn Cavanaugh, senior market strategist at Voya Financial.
“People are concerned about inflation, but I don’t even know what “overheating” means. There is still slack in the labor market, so I would not worry about runaway inflation and higher bonds yields right now reflect continuing growth,” Cavanaugh said.
What’s on the economic calendar?
The weekly initial jobless claims dropped 24,000 to 209,000, the lowest level since December 1969.
U.S. durable goods orders climbed 2.6% in March, largely thanks to a 44.5% surge in commercial plane orders. Separately, U.S. trade deficit in goods narrowed 10.3% to $68 billion last month.
Meanwhile, rates for home loans approached a five-year high as strong economic data and rising commodity prices drove a selloff in bonds.
The 30-year fixed-rate mortgage averaged 4.58%, according to Freddie Mac’s weekly survey, out Thursday. That marked an 11 basis point gain during the previous week, and the highest since August 2013.
The trade deficit in goods narrowed 10.3% to $68 billion, according to the government’s advanced report released Thursday.
In Europe, the European Central Bank made no changes to its statement on Thursday, leaving interest rates unchanged and repeating its promise to keep buying bonds until the end of September, or beyond, if necessary.
Read a recap of the ECB conference: Draghi to deal with weaker economic data
What are other markets doing?
The ICE U.S. Dollar Index DXY, +0.29% was flat at 91.173.