Stocks end mixed; Big Tech lifts S&P
Better-than-expected earnings reports contribute to optimism
U.S. stock indexes capped a day of choppy trading with a mixed finish Thursday, though solid gains by technology companies helped lift the S&P 500 and
Nasdaq composite to more record highs.
The S&P 500 edged up less than 0.1 percent. Traders bid up shares in Big Tech stocks, including Apple, Amazon and Facebook. Those gains helped outweigh losses in energy stocks, banks and elsewhere. Stocks in smaller companies, which have led the way higher this year, gave up some of their recent gains.
Stocks have been mostly
grinding higher this month amid optimism COVID-19 vaccines will lead to an economic recovery and expectations Washington will deliver more stimulus for the economy. Also, better-thanexpected results from companies reporting quarterly results have helped keep U.S. stock indexes hovering near record highs or notching new ones.
“Today is similar to yesterday in the sense that the broad indexes are flat or higher, but it’s actually the tech names that have taken leadership again,” said Ross Mayfield, investment strategy analyst at Baird.
The S&P 500 rose 1.22 points to 3,853.07, even as more stocks in the index closed lower. The Dow Jones Industrial Average slipped in the final minutes of trading, shedding 12.37 points, or less than 0.1 percent, to 31,176.01. The tech-heavy Nasdaq composite climbed 73.67 points, or 0.6 percent, to 13,530.91. The Russell 2000 index of smaller companies fell 19.20 points, or 0.9 percent, to 2,141.42.
Optimism about a strengthening economy later this year has been powerful enough to paper over worries about today’s struggles. On Thursday, a report showed that 900,000 U.S. workers filed for unemployment benefits last week, as the worsening pandemic forces businesses to shut down and lay off employees. The number was less terrible than the prior week’s 926,000, but it’s still incredibly high.
Wall Street has actually seen such miserable numbers as a reason for optimism in the past, perversely, because they add urgency on Congress to deliver more aid for the economy.
President Joe Biden has already
proposed a $1.9 trillion plan, including $1,400 cash payments for most Americans and other assistance for the economy. Even though his Democratic party controls both houses of Congress, the proposal will likely face resistance given how slim the majority is.
Other reports were more hopeful on Thursday, including better-than-expected data on the homebuilding industry.
More companies are also telling investors how badly their profits got hit during the last three months of 2020, when coronavirus counts and deaths were soaring. Wall Street came into this earnings reporting season with low expectations, forecasting a fourth straight quarter of profit declines. But most companies have been topping expectations.
“We are hearing more positive guidance from the (company) earnings calls,“said Quincy Krosby, chief market strategist at Prudential Financial. “That’s important because this is a market that’s looking ahead.”
Travelers rose 2.6 percent after the insurer reported a much stronger profit for the latest quarter than analysts expected. Homebuilders rose following the encouraging report on housing starts, led by Beazer Homes USA’S 5.1 percent gain. Paccar climbed 10.5 percent for the biggest gain in the S&P 500 after saying it will partner with autonomous-vehicle company Aurora to develop self-driving Peterbilt and Kenworth trucks.
On the losing end was United Airlines, which lost 5.7 percent after reporting a worse loss for the end of 2020 than analysts expected. The worsening pandemic is keeping fliers out of the skies, and the company’s forecast for revenue at the start of 2021 fell short of expectations.