Home BUSINESS Dow surges 400 points as tech jump leads recovery from Wednesday’s sell-off

Dow surges 400 points as tech jump leads recovery from Wednesday’s sell-off


“Corrections like this are actually healthy for the market,” said Amanda Agati, co-chief investment strategist at The PNC Financial Services Group. “What is surprising to me is where the finger is being pointed at. It’s not clear to me that anything has changed in the last month.”

“This is much more of a sentiment shift than a fundamental shift,” Agati said.

Thursday’s bounce comes as several major companies posted strong quarterly results.

Microsoft reported earnings and revenue for the previous quarter that easily topped analyst expectations. The Dow component rose 5.8 percent on the news.

Tesla, meanwhile, posted a surprise profit, sending its shares up by 9.1 percent. Twitter also surged 15.55 percent on better-than-expected results. Not all quarterly reports were good, however. AMD shares tanked more than 15 percent after the company issued weak revenue guidance for the fourth quarter.

Thursday is the busiest day of the earnings season. After the bell, Amazon, Alphabet, Expedia and Snap are all scheduled to report earnings.

Thus far, the corporate earnings season is off to a good start. S&P 500 earnings are up 24.8 percent so far, with 82 percent of the companies that have reported beating estimates, according to data from The Earnings Scout.

The data also show that earnings growth forecasts for the first two quarters are holding up nicely. As of Thursday morning, S&P 500 earnings were expected to grow by 8.44 percent in the first quarter of 2019, up from 8.39 percent on Wednesday. Expected earnings growth for next year’s second quarter also increased to 6.48 percent from 6.36 percent on Wednesday.

“Are actual earnings and changes in earnings expectations confirming such a steep drop in price? No,” said Nick Raich, CEO of The Earnings Scout, in a note. “While stocks got crushed yesterday, 1Q 2019 and 2Q 2019 S&P 500 EPS growth estimates went higher.”

Natasha Turak
contributed to this report.

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