Tech rally on Wall Street
Meta record high boosts US stock markets
February 2, 2024, 11:42 p.m
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In particular, Facebook parent company Meta is creating a good mood on Wall Street. Amazon’s shares are also rising. The indices closed in positive territory, the S&P 500 even set a record.
Strong balance sheets of large tech companies in the USA have once again given Wall Street a boost. Facebook parent Meta was able to impress with its first dividend promise, which catapulted the shares to a record high. The Nasdaq technology exchange index closed 1.7 percent higher at 15,628 points. The Dow Jones index of standard stocks advanced 0.4 percent to 38,654 points. The broad S&P 500 gained 1.1 percent to a record close of 4,958 points.
A report from the US Department of Labor caused a slight dampener. In January, 353,000 new non-agricultural jobs were added. Economists polled by Reuters had only expected 180,000. Speculation that the US Federal Reserve would soon turn interest rates diminished in view of the boom. The Fed is trying to keep inflation in check with a tight monetary policy and cool down the hot labor market.
On the foreign exchange market, the dollar index rose by 0.9 percent to 104 jobs according to the jobs data. The yield on ten-year US Treasuries rose to 4.045 percent from 3.863 percent previously. The price of gold fell on the raw materials markets. The troy ounce fell by 0.9 percent to $2,036. But the joy of the company’s strong balance sheets overshadowed investors’ concerns about interest rates.
“While lower interest rates would certainly be welcome, it is becoming increasingly clear that markets and the economy are coping well with the high interest rate environment, so investors may feel that the need for monetary easing is less urgent,” said Richard Flynn, senior managing director at Charles Schwab UK.
Meta on the rise
Meta shares temporarily jumped 21.8 percent to a record high of $481. This increased the company’s market value by around $200 billion. At the end of the trading day there was still an increase of a good 20 percent. The figures from the online retailer Amazon were also convincing. The shares rose by almost eight percent after the cloud business signaled its first profits through AI-supported functions. Apple, however, was trading 0.5 percent lower due to weaker business in China.
Cigna shares also rose, rising 5.4 percent. The health insurer raised its full-year profit forecast after lower-than-expected medical costs. A surprisingly large profit pushed Chevron shares up 2.9 percent. In the fourth quarter, adjusted earnings were $3.45 per share, above analysts’ estimates of $3.21. Analysts at UBS said that Chevron ended 2023 on a positive note after a challenging third quarter.
Shares of Barbie manufacturer Mattel rose 4.1 percent. In a letter to the company, activist investor Barington Capital is pushing for $2 billion in stock buybacks and strategic alternatives for the Fisher-Price and American Girl brands.