Shares soared again on Thursday, following a strong earnings report from Meta Platforms, as the market looked to recover from this month’s sell-off.
The Nasdaq Tech Composite rose 3.1% to 12,871.53. The S&P 500 gained 2.5% to 4,287.50. The Dow Jones Industrial Average added 614.46 points, or 1.9%, to 33,916.39.
Investors have endured volatile trading sessions this week as stocks struggle to find direction. Major averages staged a big intraday rally to close higher on Monday, but stocks fell on Tuesday, leading to the Nasdaq’s worst day since 2020. Stocks tried to rally on Wednesday, but pared gains late in the session with the Nasdaq closing unchanged at its 2022 low.
“We’ve had a significant sell-off here, so sometimes you get these counter-trend moves,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Despite Thursday’s rally, the Nasdaq Composite is on track for its worst month since March 2020, down 9.5%. The S&P 500 is down almost 5.4% and the Dow Jones 2.2% in April, ahead of the last trading day of the month.
A slew of corporate earnings reports buoyed market sentiment on Thursday, appearing to be a green light for investors to pick up beaten names.
“It’s been a pretty good earnings season and that’s supportive of the equity market,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
Meta shares rose 17.5% after improving earnings, a sign investors may see signs of relief in the battered tech sector. The shares fell 48% in the year before the results.
Qualcomm gained 9.7% on the back of strong earnings, while PayPal rose about 11.5% despite issuing weak guidance for the second quarter.
Merck shares rose 4.9% and led the Dow Jones gains after a surge in earnings. McDonald’s, Eli Lilly and Southwest closed higher on Thursday after their quarterly reports.
Apple and Amazon rose more than 4% before reporting earnings after the bell.
On the downside, shares of Teladoc plunged about 40.2% after the company reported weaker-than-expected results.
Stocks have struggled this month amid concerns about slowing global growth, rising inflation and Federal Reserve tightening.
US gross domestic product unexpectedly fell 1.4% in the first quarter from a year earlier, compared with the 1% growth expected by economists surveyed by Dow Jones.
Some investors downplayed the economic contraction, citing rising prices and a trade deficit as the biggest contributors to the decline.
“In a nutshell, blame the record trade deficit for the contraction in real GDP, coupled with an 8% price deflator,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note.