Meta drives Nasdaq higher: After hours earnings reports mixed

 

The S&P 500 rose to its highest level in five months on Thursday as better-than-expected Meta results further improved sentiment around technology shares, which led the market lower last year.

The broader market index jumped 1.47 per cent to 4,179.77, or its best level since August. Meanwhile, the tech-heavy Nasdaq Composite advanced 3.25 per cent to 12,200.82, or its highest level since September.

The gains come ahead of a trio of Big Tech results after the bell in Apple, Amazon and Alphabet.

At the same time, the Dow Jones Industrial Average underperformed, falling 39.02 points, or 0.11 per cent, to 34,053.94. The major index was dragged lower by Merck shares after the pharmaceutical firm issued a weak outlook in its latest earnings results,

Meta surged about 23 per cent in its best day since 2013 after reporting a fourth-quarter beat on revenue and announcing a $40 billion stock buyback. That helped investors look past losses in the business unit overseeing the metaverse. Comments by Mark Zuckerberg, Meta’s C.E.O., about 2023 being the “year of efficiency” also appear to be reassuring investors that Big Tech companies, which have announced a string of layoffs recently, are serious about rethinking their spending priorities in an uncertain economy. After falling 64 percent last year, Meta shares have risen more than 50 percent this year, based on today's close.

Other mega-cap tech stocks rose on the back of those results. Shares of Google-parent Alphabet were up more than 5 per cent, while Amazon jumped more than 6 per cent. Apple shares gained more than 2 per cent.

The S&P 500 information technology sector is up more than 13 per cent this year after a decline of more than 28 per cent last year.

A wave of corporate layoffs that began in technology is now flowing through other industries. In recent weeks, employers as varied as toy maker Hasbro Inc., chemicals giant Dow Inc. and payments pioneer PayPal Holdings Inc. announced job cuts, following reductions at tech giants such as Alphabet Inc.’s Google and Wall Street firms like Goldman Sachs Group Inc. On Wednesday, FedEx Corp. and electric-vehicle startup Rivian Automotive Inc. said they would cut jobs.

Amazon, Ford, Starbucks and Alphabet reported their earnings after the bell. Amazon and Alphabet shares are currently down 6 per cent in after market trading

Ford has announced a cut in the price of its electric Mustang Mach-E, an early sign of a burgeoning EV price war spurred by Tesla Earlier Thursday, Ford reported January new vehicles sales that showed slight improvement over the same period last year. Ford shares are currently up 7 per cent in after market trading

In the S&P500 sectors, communication services, tech, and consumer discretionary among the standouts in Thursday trading. Underperformers include commodity sectors with the dollar stronger, with oil majors, oilfield services, precious metals miners, and global miners among the weakest groups.

Despite the recent oil price performance Shell has joined oil giants in reporting record profit. The British oil producer earned roughly $40 billion last year, its highest profit in 115 years, as fuel demand after Russia’s invasion of Ukraine sent energy prices soaring.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 70.77 US cents (Thu: 71.31 US cents).

Commodities

Iron ore futures are pointing to a 1.1 per cent fall. Iron ore is 1.2 per cent lower at US$125.15 tonne.

Gold lost 0.9 per cent. Silver fell 0.3 per cent. Copper lost 0.5 per cent and oil dropped 0.8 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.8 per cent, Frankfurt gained 2.2 per cent while Paris closed 1.3 per cent higher.

In Asian markets, Tokyo’s Nikkei added 0.2 per cent, Hong Kong’s Hang Seng lost 0.5 per cent while China’s Shanghai Composite closed flat.

Yesterday, the Australian sharemarket closed 0.1 per cent higher at 7,512.

Ex-dividends

Advanced Share Registry (ASX:ASW) is paying 0.5 cents fully franked
Qualitas Real Estate Income Fund (ASX:QRI) is paying 1.0597 cents unfranked

Dividends payable

Select Harvests (ASX:SHV)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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