Most indexes on the New York Stock Exchange rallied during today’s trading against strong quarterly earnings reports, as well as the US Federal Reserve’s decision to temporarily halt the rise of benchmark interest rates.
The blue-chip index Dow Jones Industrial Average fell by 0.06% to 24,999.67 points. The technology index Nasdaq Composite added 98.66 points to its value, ending the day at a level of 7,281.74 points.
The broad benchmark S&P 500 reported a 0.86% growth to 2,704.10 points. The S&P communications services sector surged 3.76%, leading gains among the 11 major S&P sectors. On monthly basis, the index has its best performance at the beginning of the year since January 1987, accumulating an increase of 7.87% this month. Despite the good result, S&P 500 is still below the 2,760.17 level it finished November. And as far as recoveries go, this is the S&P 500’s fourth-biggest gain following a negative December.
On Wednesday, the Federal Reserve decided to keep interest rates unchanged at its two-day meeting and promised that the future monetary policy change would be made patiently depending on the development of the economy.
The central bankers voted unanimously on keeping the interest rates unchanged at 2.25-2.50%.
On the bond markets, the yields on 10-year and 30-year US government bonds fell to 2.636% and 3.002%, respectively.
In the currency markets, the dollar index recorded an increase of 0.24% to 95.57 points.
Corporate stocks performance
The corporate statements of Facebook and General Electric were the main stimulus for S&P’s good performance in today’s session.
Shares on Facebook jumped by 10.8%, while those on GE rose by 11.65%.
The stocks of Alphabet also jumped significantly, raising the company’s market capitalization by 2.5%. Most of the other FAANG members performed also strong with Amazon’s stocks adding 2.9% and Apple rising by 0.9%. The only member of the group of the largest technology giants that reported decrease was Netflix, which stocks fell by almost 0.5%.
Not everyone participated in Thursday’s rise, however. Microsoft fell by 1.8% after the company reported weaker-than-expected revenue and earnings that barely beat expectations. The stocks of DowDuPont fell by 9.2% on the back of mixed quarterly results. Tesla shares dipped 0.5% on the back of weaker-than-expected earnings.
Corporate earnings reports
Facebook reported a record quarterly profit despite the flow of negative news around it, which led CEO Mark Zuckerberg to say the socio-media giant has gone through a turning point and plans to focus this year on building new products. Facebook reported earnings per share of 2.38 USD in the fourth quarter, typically the heaviest payback period for advertisers, compared to 1.44 USD a year earlier. The company revenue amounted 16.9 billion USD for the quarter. Facebook’s net profit rose to 6.88 billion USD.
General Electric reports fourth-quarter revenue of 33.3 billion USD, which was higher than expected. The company also announces a tentative 1.5 billion USD settlement with the Justice Department stemming from GE’s now-defunct subprime mortgage business WMC. General Electric’s adjusted fourth-quarter earnings came in at 17 cents per share, a 60 percent decline from a year earlier. GE did not provide a forecast for full-year 2019 earnings. Industrial free cash flow was 4.5 billion USD for the year, which was above the market expectations. GE’s units of aviation, health care, and Baker Hughes oil and gas all saw profits rise in the fourth quarter. The aviation business posted revenue of 8.5 billion USD, which represents an increase of 21% YoY.
United Parcel Service (UPS) reported fourth-quarter 2018 earnings per share of 1.94 USD, representing an increase of 17% YoY and beating the analysts’ estimate. The company’s revenue amounted to 19.85 billion USD. UPS delivered more than 21 million packages per day, on average, in 2018. Internationally, the company reported a 2.9% increase in revenue with 6.3% growth in operating profit.