Hedge funds/large speculators back slightly into net long territory for S&P 500 futures pic.twitter.com/kwS9bazc6l
— Liz Ann Sonders (@LizAnnSonders) October 22, 2024
The Dow Jones Industrial Average rallied to a new record close on Thursday after strong economic data eased lingering fears of a potential recession. The blue-chip index rose 161 points, or 0.37%, to 43,239.05, buoyed by a 9% gain in semiconductor stocks after strong quarterly results. The Nasdaq inched higher, adding 0.04% to 18,373.61, while the S&P 500 closed slightly down 0.02% at 5,841.47.
Chip stocks were the front-runners of Thursday’s action, but some gains were given up as the market closed.
Different indexes, same story … both S&P 500 (blue) and Russell 1000 (orange) are at new all-time highs
[Past performance is no guarantee of future results] pic.twitter.com/y040kGF4Ax— Liz Ann Sonders (@LizAnnSonders) October 21, 2024
Taiwan Semiconductor Manufacturing Company (TSMC) ended the day up 9.8% after raising its revenue forecast for the last quarter of the year. Michael Green, chief strategist of Simplify Asset Management, noted that the rotation back into Big Tech names appeared to be investors returning to their “normal state of affairs.”
Good Morning from #Germany, where the "Glorious 5" #SAP, Siemens, Deutsche Telekom, Allianz, Munich Re continue to dominate the stock market and returns following good numbers from SAP. While the benchmark index Das has risen by 16.6% Ytd, the Glorious 5 have surged even… pic.twitter.com/hidjw27wOc
— Holger Zschaepitz (@Schuldensuehner) October 22, 2024
New economic data released Thursday showed that consumer spending remains robust, with monthly spending rising 0.4%, surpassing the Dow Jones consensus estimate of 0.3%.
Sales excluding autos shot up 0.5%, much higher than the 0.1% forecast. Jobless claims for the week ended Oct. 12 were also lower than expected.
Green mentioned that seasonal adjustments largely contributed to the strong retail sales numbers. Despite the robust data, he suggested that the rally was more about investor optimism. Travelers significantly contributed to the Dow’s rise, propelled by strong quarterly results.
The stock closed up 8%. Deutsche Bank raised its price target for McDonald’s ahead of its third-quarter earnings expected on Oct.
Dow breaks records amid economic optimism
29. Analyst Lauren Silberman increased the target price from $290 to $345, implying shares could rise by 10%. McDonald’s shares have climbed 5% this year compared to the S&P 500’s 23% rise.
Chinese funds had their biggest weekly drop in nearly two years, driven by a continued pullback in trades related to the Asian country. ETFs focused on China dropped more than 8% this week. Blackstone shares jumped around 7% following a strong third-quarter earnings report.
CSX Corporation stock fell 5.7% after the company reported lower-than-expected third-quarter earnings. Walgreens shares slid nearly 5%, partially offsetting a previous day’s 15.8% gain following a quarterly earnings beat and the announcement of plans to close 1,200 stores over three years. This week, the utilities sector led gains with a 3.4% rise, making it the S&P 500’s top performer.
In contrast, the energy sector was the worst performer, down 2.7%. Information technology stocks were poised for their longest winning streak this year, finishing the week more than 1% higher. Shares of the buy now, pay later company Affirm Holdings dropped 8%, marking its worst day since July, following news that competitor Klarna’s payment option would be available through Apple Pay.
Investor sentiment remains cautiously optimistic as key economic data points to robust consumer spending and lower than expected jobless claims. However, market movements indicate cautious optimism with various sectors and individual stocks experiencing mixed performances.
