S&P 500 hits record after blowout earnings from Facebook and Apple

The S&P 500 clinched a new intraday record on Thursday after blowout earnings results from two of the biggest tech companies in the world: Apple and Facebook.

The Dow Jones Industrial Average gained 140 points while the S&P 500 added 0.7% and notched a new all-time high. The tech-heavy Nasdaq Composite added 0.85% as a host of big-tech names rose across the board. Microsoft, Amazon and Alphabet all rose at least 0.5%.

Investors pointed to strong earnings results from both iPhone-maker Apple and social media platform Facebook in explaining Thursday’s gains.

Apple said that sales jumped 54% during the quarter, with each product category seeing double-digit growth. The company also said it would increase its dividend by 7%, and authorized $90 billion in share buybacks. Apple shares rose 1%.

Facebook’s revenue jumped 48%, driven by higher-priced ads. Facebook surged more than 6%. Qualcomm shares soared 4.8% after reporting a 52% jump in revenue.

Cruise stocks jumped after the CDC said sailings from U.S. ports could begin mid-July. Carnival and Norwegian shares jumped more than 4% each.

“The primary market trend remains positive,” said Keith Lerner, chief market strategist at Truist. “But we expect a choppier environment as tensions are set to persist between better economic growth and earnings prospects versus the potential for higher taxes and rising interest rates as the economy normalizes,” he added.

Thursday marks President Joe Biden’s 100th day in office. On Wednesday evening, he made his first address to a joint session of Congress where he pushed his so-far popular agenda, which includes a $2 trillion infrastructure plan as well as a freshly unveiled, $1.8 trillion plan for families, children and students.

Thursday is also the busiest day of the quarterly earnings season, with roughly 11% of the S&P 500 slated to provide quarterly updates.

McDonald’s published its results before the opening bell and told investors that its sales have finally topped pre-pandemic levels. The Dow component also raised its outlook for systemwide sales growth.

Caterpillar beat expectations but traded slightly lower, while Merck shed 3% following disappointing results. Amazon, Gilead Sciences, Twitter, U.S. Steel and Western Digital will post results after the market closes.

Economic data released Thursday gave investors an update on the progress of the economic recovery.

First-quarter GDP hit an annualized rate of 6.4%, according to a report published by the Bureau of Economic Analysis, a sign that the U.S. economy began 2021 with an acceleration of commercial activity. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003.

The Labor Department, meanwhile, reported that initial jobless claims last week totaled 553,000, just above the 528,000 estimate issued by Dow Jones.

The Federal Reserve said Wednesday that it would hold interest rates near zero. The S&P slid from its high after Federal Reserve Chairman Jerome Powell said during a press conference following the Federal Open Market Committee’s decision that there are some signs of froth in the market.

“Rates remain unchanged for now and, despite improving economic data, taper talk remained off the table at today’s Federal Reserve meeting,” said Bethany Payne, portfolio manager at Janus Henderson.

“As vaccination rates accelerate, employment strengthens, and expansive fiscal policy adds further support to household and business incomes, investors are now looking for signs of whether the central bank safety net could be withdrawn sooner than expected,” she added.

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