Developments on the stimulus front and an earnings blowout that seems to have no end in sight are helping the market push toward record highs as the mania surrounding Reddit stocks continues to simmer down.
While the Dow Jones industrial average remained roughly flat shortly after the open, the the broader-market S&P 500 ticked up 0.3%, and the tech-heavy Nasdaq jumped 0.7%, climbing past record highs from late January.
Among firms heading up market gains, Alphabet stock is surging 7%, hitting a new all-time high, after the Mountain View, Calif.-based firm reported earnings that surpassed Wall Street expectations and included a 24% jump in revenue, which hit $56.9 billion last quarter.
Though its stellar earnings may have been overshadowed by the announcement that Jeff Bezos will step down as CEO, fellow tech giant Amazon also posted better-than-expected results boosted by a stay-at-home holiday season–including record revenue that surpassed $100 billion for the first time ever; shares are up 2%.
Upside to earnings extended beyond big tech, with private equity monolith Apollo Global Management also posting better-than-expected profit that is helping to lift the firm’s stock nearly 3%; Spotify shares, on the other hand, are sinking 7% after the Sweden-based streaming company provided an outlook for this year that failed to impress Wall Street.
Meme stock volatility continues Wednesday after a terrible Tuesday for top Reddit stocks: GameStop is up nearly 20% (after plunging 60%), and AMC shares are up 12%, helping to recoup a nearly 40% loss from Tuesday.
Global stocks, meanwhile, are mixed, with Japan’s Nikkei 225 ending the day up 1%, while the United Kingdom’s FTSE 100 remains roughly flat, and Germany’s DAX Index ticks up 0.4%.
Stocks rallied Tuesday afternoon after Senate Democrats voted to begin debate on a budget resolution for the 2021 fiscal year that will allow Democrats to pass much of President Biden’s $1.9 trillion stimulus plan without any Republican votes.
“Equities are largely extending their gains as the nonsense-stock focus from last week fades, and investors recenter their attention on the rally’s three pillars of stimulus, earnings and vaccines. Democrats in Washington are pushing forward with reconciliation to pass Biden’s rescue fiscal plan, and the only question now is how much the $1.9 trillion ask gets cut to pass the Senate,” Vital Knowledge Media Founder Adam Crisafulli said Wednesday morning, estimating that the package gets cut to as low as $1.5 trillion. “Meanwhile, the fourth-quarter earnings season remains spectacular, with blowout reports from Amazon and Alphabet Tuesday night and a bunch of encouraging releases in Europe this morning–including Novo Nordisk, Publicis and Siemens.”
What To Watch For
Earnings still to come this week include eBay, PayPal and Qualcomm after the close Wednesday, and Snapchat, Pinterest and healthcare giants Cigna, Merck and Gilead all on Thursday.
Treasury Secretary Janet Yellen has called on the heads of the Federal Reserve, Securities and Exchange Commission and other regulators to meet with her Thursday or Friday to discuss the concerning volatility surrounding Reddit-fueled meme stocks, Reuters reported Tuesday evening.
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