U. S. equities opened higher on Thursday as the tech sector was lifted by strong earnings from key companies.
U. S. equities opened higher on Thursday as the tech sector was lifted by strong earnings from key companies.
The Dow Jones industrial average hit a record high at the open, with Boeing contributing the most gains. The S&P 500 also hit a record, with telecommunications and technology leading advancers. The Nasdaq composite outperformed, rising half a percent and also notching an all-time high.
Shares of Facebook jumped more than 4 percent in early trade, pushing the Technology Select Sector SPDR Fund exchange-traded fund (XLK) 0.7 percent higher.
The social media giant reported second-quarter earnings per share of $1.32 on revenue of $9.32 billion. Analysts polled by Reuters expected the company to post earnings per share of $1.13 on sales of $9.2 billion. The company also reported better-than-expected monthly active users, a key metric for Facebook.
Wedbush Securities analyst Michael Pachter said in a note Thursday he expects Facebook to fend off competition ” its initiatives around the camera and augmented reality can leverage its massive user base and suite of applications to streamline adoption and drive higher engagement.”
Facebook’s stock is one of the best-performing stocks in the S&P 500 this year, having gained 44 percent during the time period.
PayPal also reported quarterly results that beat expectations, sending the mobile payments company’s stock 3.5 percent higher before the bell.
“S&P [is] just marginally higher than it was 6 days ago, after the steep runup from 7/11-7/20 but now signs of Technology attempting to push higher [are] yet again helping US indices, ” Mark Newton, managing member at Newton Advisors, said in a note Thursday.
Tech has been the stalwart of the U. S. stock market this year. The sector has spiked 23 percent in 2017, easily outperforming other sectors.
Overall, this earnings season has been positive, with most S&P 500 companies topping profit and sales estimates.
In economic news, initial jobless claims came in at 244,000, slightly above the expected 240,000. Durable goods orders, meanwhile, rose 6.5 percent in June.
The data were released a day after the Federal Reserve said it could start unwinding its massive $4.5 trillion balance sheet “relatively soon” if the economy moves along as expected.
“This is a clear signal that the Fed will start unwinding its gargantuan balance sheet in September, ” said Luke Hickmore, senior investment manager at Aberdeen Asset Management.
“It also leaves the door open for one last rate hike in December. You get the sense that [Fed Chair Janet] Yellen would like to raise rates again this year. But inflation just doesn’t support it at the moment. So the Fed needs to make a call on whether to put less stock in inflation or not, ” Hickmore said.
U. S. Treasury yields rose on Thursday, with the 10-year yield near 2.32 percent and the two-year around 1.367 percent.
