[New York Stock Market] Focus on Corporate Earnings... 3 Consecutive Trading Days of Gains, Nasdaq Up 0.75%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The three major indices of the U.S. New York stock market all rose on the first trading day of February, the 1st (local time), continuing their upward trend for the third consecutive trading day. Just a week ago, the market was engulfed in early tightening concerns, but now it appears to be focusing more on corporate earnings and economic indicators.

On this day in the New York stock market, the Dow Jones Industrial Average closed at 35,405.24, up 273.38 points (0.78%) from the previous close. The large-cap S&P 500 index rose 30.99 points (0.69%) to 4,546.54, and the tech-heavy Nasdaq index ended the day at 14,346.00, up 106.12 points (0.75%).

The market paid attention to corporate earnings announcements and economic indicators on this day. Jeff Kilburg, Chief Investment Officer at Sanctuary Wealth, said, "Investors are finally refocusing on earnings season," adding, "Optimism about earnings season is growing as improved forward guidance is seen."

Earlier, the U.S. central bank, the Federal Reserve (Fed), strongly signaled a rate hike in March, causing the S&P 500 index to slide 5.3% throughout January. This was the largest monthly decline since March 2020. The tech-heavy Nasdaq index's decline reached the 9% range. The Wall Street Journal (WSJ) reported, "As the new month (February) begins, investors are bringing corporate earnings and economic indicators," and "the market is now focusing on portfolio allocation strategies considering rate hikes."

By sector, energy stocks showed the largest gains. Industrials also rallied. ExxonMobil, which posted fourth-quarter net profits exceeding expectations thanks to recent oil price increases, announced it would resume share buybacks, closing up 6.4% from the previous close.

Bank stocks also rose, with Goldman Sachs and JP Morgan Chase increasing by 2.6% and 1.7%, respectively. Wells Fargo jumped over 3%. Bank stocks rose alongside the U.S. 10-year Treasury yield, which surpassed the 1.8% level on the same day. CNBC reported that this rise in Treasury yields followed the release of the January Manufacturing Purchasing Managers' Index (PMI) of 57.6 by the Institute for Supply Management (ISM), signaling increased inflation.

Technology stocks, which were hit hard by early tightening fears in January, showed mixed results. Netflix surged over 7% from the previous close. Alphabet (1.6%) and Meta (1.83%) also rose. However, Tesla (-0.62%), Apple (-0.10%), and Microsoft (-0.71%) declined slightly. Shima Shah, strategist at Principal Global Investors, noted, "Technology stocks have become more vulnerable to rate hikes this year."

Additionally, Boeing and Visa rose by over 4% and 2%, respectively. UPS soared 14% after its quarterly earnings announcement. According to FactSet, about 77% of S&P 500 companies that reported earnings by the morning of this day posted earnings per share exceeding expectations. After the market close, earnings reports from Alphabet, the parent company of Google, General Motors, Starbucks, AMD, and PayPal are scheduled.

Experts expect that as the market adapts to the tightening environment, indicators and earnings will support the market. Chris Hyberland, global equity strategist at Wells Fargo, said, "Economic growth and corporate earnings are expected to remain solid throughout this year," adding, "The Fed will not be excessively tight in scaling back monetary policy."

Oil prices closed slightly higher. On this day at the New York Mercantile Exchange, March West Texas Intermediate (WTI) crude oil prices rose $0.05 (0.06%) to $88.20 per barrel. On the 2nd, the OPEC+ meeting, a consultative group of OPEC and non-OPEC oil-producing countries led by Russia, will be held.