Upbeat Tech Earnings Contributing To Continued Strength On Wall Street

Stocks have moved mostly higher in morning trading on Wednesday, extending the strong upward move seen over the three previous sessions. The Nasdaq and the S&P 500 continue to rebound off last week’s multi-month lows.

Currently, the major averages are all in positive territory, although the Dow is up just 12.20 points or less than a tenth of a percent at 35,417.44. The Nasdaq is up 53.57 points or 0.4 percent at 14,399.57 and the S&P 500 is up 18.82 points or 0.4 percent at 4,565.36.

The continued strength on Wall Street partly reflects a positive reaction to upbeat earnings from some big-name companies like Google parent Alphabet (GOOGL).

Shares of Alphabet jumping by 6.3 percent after the tech giant reported fourth quarter result that exceeded analyst estimates on both the top and bottom lines.

Alphabet also announced a 20-for-1 stock split, which has led to speculation the stock could be headed for inclusion in the Dow.

Chipmaker Advanced Micro Devices (AMD) has also shown a strong move to the upside after reporting better than expected fourth quarter results and providing upbeat guidance.

Meanwhile, shares of PayPal (PYPL) have moved sharply lower after the payment service reported weaker than expected fourth quarter earnings and provided disappointing guidance.

Traders are also digesting a report from payroll processor ADP unexpectedly showing a sharp pullback in U.S. private sector employment in the month of January.

ADP said private sector employment plunged by 301,000 jobs in January after jumping by a downwardly revised 776,000 jobs in December.

The steep drop surprised economists, who had expected private sector employment to increase by 207,000 jobs compared to the spike of 807,000 jobs originally reported for the previous month.

“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said ADP chief economist Nela Richardson.

With AMD leading the sector higher, semiconductor stocks are seeing significant strength on the day, driving the Philadelphia Semiconductor Index up by 1.7 percent.

Notable strength is also visible among commercial real estate stocks, as reflected by the 1.2 percent gain being posted by the Dow Jones U.S. Retail Estate Index.

On the other hand, biotechnology stocks are giving back ground following recent strength, dragging the NYSE Arca Biotechnology Index down by 1.1 percent.

Gilead Sciences (GILD) has led the sector lower after reporting weaker than expected fourth quarter results amid declining sales of its Covid-19 treatment.

Tobacco, airline and oil service stocks have also moved lower on the day, limiting the upside for the broader markets.

In overseas trading, stock markets across the Asia-Pacific region moved higher on Wednesday, with several major markets still closed for holidays. Japan’s Nikkei 225 Index surged by 1.7 percent, while Australia’s S&P/ASX 200 Index jumped by 1.2 percent.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has edged down by 0.1 percent, the French CAC 40 Index is up by 0.5 percent and the U.K.’s FTSE 100 Index is up by 0.7 percent.

In the bond market, treasuries have moved to the uspide after fluctuating early in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.8 basis points at 1.772 percent.

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