Upbeat Earnings, Economic News Contributing To Strength On Wall Street

Stocks have moved mostly higher in morning trading on Thursday, with the major averages all moving to the upside after ending the previous session narrowly mixed. The tech-heavy Nasdaq has led the advance, while the Dow is posting a more modest gain.

Currently, the Nasdaq is up 170.04 points or 1.2 percent at 14,297.32 and the S&P 500 is up 29.61 points or 0.7 percent at 4,596.36. The Dow is up 71.06 points or 0.2 percent at 35,591.18, on pace for a record-tying fourteenth straight day of gains.

The strength on Wall Street partly reflects a positive reaction to upbeat earnings news, with Facebook parent Meta Platforms (META) leading the rally by the Nasdaq.

Shares of Meta are surging by 7.4 percent after the company better than expected second quarter results and provided upbeat guidance.

Fast food giant McDonald’s (MCD) has also jumped by 1.8 percent after reporting second quarter results that beat analyst estimates on both the top and bottom lines.

Shares of Comcast (CMCSA) are also seeing significant strength after the cable and entertainment giant reported better than expected second quarter results.

Meanwhile, a steep drop by Honewell (HON) is limiting the upside for the Dow, with the conglomerate plunging by 4.5 percent after reporting mixed second quarter results.

Stocks are also benefitting from the release of a batch of upbeat U.S. economic data, including a Commerce Department showing an unexpected acceleration in the pace of economic growth in the second quarter.

The report said real gross domestic product surged by 2.4 percent in the second quarter after jumping by 2.0 percent in the first quarter. Economists had expected the pace of GDP growth to slow to 1.8 percent.

The Commerce Department said the unexpected acceleration in GDP growth primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment.

The positive contributions were partly offset by a downturn in exports and decelerations in consumer spending, federal government spending, and state and local government spending.

The Labor Department also released a report unexpectedly showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended July 22nd.

The report said initial jobless claims slipped to 221,000, a decrease of 7,000 from the previous week’s unrevised level of 228,000. Economists had expected jobless claims to inch up to 235,000.

A separate report released by the Commerce Department showed new orders for U.S. manufactured durable goods soared by much more than expected in the month of June.

The Commerce Department said durable goods orders shot up by 4.7 percent in June after surging by an upwardly revised 2.0 percent in May.

Economists had expected durable goods orders to increase by 1.0 percent compared to the 1.8 percent jump that had been reported for the previous month.

Excluding a spike in orders for transportation equipment, durable goods orders rose by 0.6 percent in June after climbing by 0.7 percent in May. Ex-transportation orders were expected to come in unchanged.

Sector News

Semiconductor stocks have shown a significant move to the upside on the day, resulting in a 3.0 percent jump by the Philadelphia Semiconductor Index.

Considerable strength is also visible among computer hardware stocks, as reflected by the 1.8 percent gain being posted by the NYSE Arca Computer Hardware Index.

Banking, retail and housing stocks are also seeing notable strength, with housing stocks benefitting from a report showing an unexpected uptick in pending home sales in June.

On the other hand, gold stocks have moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 2.6 percent.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, as gold for August delivery is tumbling $26 to $1,944.10 an ounce.

Airline stocks have also shown a substantial move to the downside, with the NYSE Arca Steel Index slumping by 2.3 percent to its lowest intraday level in over a month.

Shares of Southwest Airlines have plummeted by 8.9 percent despite reporting better than expected second quarter results, as traders worry about higher costs.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while Hong Kong’s Hang Seng Index jumped by 1.4 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged by 2.1 percent, the German DAX Index is up by 1.6 percent and the U.K.’s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries have moved sharply lower following the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9.3 basis points at 3.944 percent.