© Reuters. FILE PHOTO: Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the NYSE in New York
By Caroline Valetkevitch
(Reuters) – The Dow and S&P 500 rose slightly on Wednesday, registering a third straight session of gains, with Alphabet (NASDAQ:GOOGL) Inc's shares hitting a record high following its strong quarterly results.
Alphabet shares ended up 7.3% and provided the biggest boost to the S&P 500. The Google parent late 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 Wednesday.
The Cboe Volatility index was down, and wild swings in stock prices of GameStop (NYSE:GME) and other social media favorites subsided following a recent trading frenzy. GameStop shares ended the day up just 2.7%.
"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.com Inc (NASDAQ:AMZN) shares eased 2% 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.
U.S. Treasury Secretary Janet Yellen is calling a meeting this week of top officials, including from the U.S. Securities and Exchange Commission and the Federal Reserve, to discuss market volatility driven by retail trading in shares of GameStop, silver and other stocks favored on social media. [L1N2K906E]
The SEC is reviewing social media posts for signs of potential fraud behind the recent trade frenzy in shares of GameStop and other companies, according to a Bloomberg News report, citing people familiar with the matter.
U.S. President Joe Biden held a conference call with House of Representatives Democrats and talked with Democratic senators at the White House as the party prepared to use a procedural maneuver to push Biden's $1.9 trillion coronavirus relief package through without Republican votes if necessary.
On the economic front, the ADP Report showed hiring by U.S. private employers rebounded by 174,000 in January after a drop in December. A more comprehensive jobs report is expected on Friday.
A separate ISM survey showed U.S. services industry activity raced to its highest level in nearly two years in January.
Volume on U.S. exchanges was 13.97 billion shares, compared with the 15.6 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.47-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored advancers.
The S&P 500 posted 8 new 52-week highs and no new lows; the Nasdaq Composite recorded 172 new highs and 1 new lows.Leave a comment