Stocks rose Thursday as the market tried to recover some ground lost during this month’s sell-off after a strong earnings report from Meta Platforms.
The Dow Jones Industrial Average added about 110 points or 0.3%. The S&P 500 gained 1%. The Nasdaq Composite jumped 1.5%.
A slew of corporate earnings reports drove market sentiment Thursday, appearing to be a green light for investors to pick up beaten-down names.
“It’s been a pretty good earnings season and that is supportive for the equity market,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said.
Shares of Meta surged about 16% following a beat on earnings, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.
Qualcomm gained more than 8% on the back of strong earnings, while PayPal rose roughly 5% despite issuing weak guidance for the second quarter.
McDonald’s, Merck, Eli Lilly and Southwest were all higher Thursday after better-than-expected quarterly reports.
Thursday’s moves followed a volatile session Wednesday that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off.
Stocks have struggled this month amid concerns about slowing global growth, rising inflation and the Federal Reserve’s monetary tightening.
U.S. gross domestic product unexpectedly declined in the first quarter by 1.4% from the year prior, compared with the 1% growth expected by economists surveyed by Dow Jones. Stock futures came off their highs slightly after the release Thursday morning.
Some investors brushed off the economic contraction, citing the jump in prices and trade deficit as contributing the most to the decline.
“Bottom line, blame the record high trade deficit for the contraction in real GDP, along with an 8% price deflator,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note.
The S&P 500 is down 6.8% for April — on pace for its biggest monthly decline since March 2020. The Nasdaq Composite has lost nearly 11% since the start of April and is headed for its worst one-month performance since October 2008. The Dow has been the relative outperformer, losing about 4% this month.