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U.S. stock markets closed mostly higher on Thursday buoyed by strong earnings results and expectations of more fiscal stimulus. However, investors remained concerned about weaker-than-expected labor market data. The S&P 500 and the Nasdaq Composite ended in the green while the Dow suffered a marginal loss.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 7.1 points to close at 31,430.70. Notably, 13 components of the 30-stock index ended in the green while 16 in red and one remained unchanged. The blue-chip index has recorded a new all-time high of 31.543..82 in intraday trading. However, the Nasdaq Composite finished at 14,025.77, gaining 0.4% due to strong performance by large-cap tech stocks and marking a fresh closing high.
Meanwhile, the S&P 500 rose 0.2% to end at 3,916.38, reflecting a fresh closing high. The Energy Select Sector SPDR (XLE) tumbled 1.5% while the Technology Select Sector SPDR (XLK) gained 1.1%. Notably, seven out of eleven sectors of the benchmark index closed in the red and four in green.
The fear-gauge CBOE Volatility Index (VIX) was down 3.4% to 21.25. A total of 17.69 billion shares were traded on Thursday, higher than the last 20-session average of 15.96 billion. Decliners outnumbered advancers on the NYSE by a 1.08-to-1 ratio. On Nasdaq, a 1.22-to-1 ratio favored declining issues.
Impressive Fourth-Quarter Earnings Results So Far
As of Feb 10, 333 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 5.6% from the same period last year on 3.2% higher revenues, with 80.8% beating EPS estimates and 78.1% beating revenue estimates.
On Feb 11, Zebra Technologies Corp. (ZBRA - Free Report) came out with fourth-quarter 2020 earnings of $4.46 per share, beating the Zacks Consensus Estimate of $3.79. The company posted revenues of $1.31 billion for the quarter, surpassing the Zacks Consensus Estimate by 4.07%. (Read More)
Generac Holdings Inc. (GNRC - Free Report) came out with quarterly earnings of $2.12 per share, beating the Zacks Consensus Estimate of $1.96. The company posted revenues of $761.08 million for the quarter, outpacing the Zacks Consensus Estimate by 4.87%.( Read More)
The Department of Labor reported that weekly jobless claims came in at 793,000 for the week ended Feb 6, higher than the consensus estimate of 763,000. Previous week's data was revised upward to 812,000 from 779,000 reported earlier. However, the data for the latest reported week was the lowest in five weeks.
Continuing claims (for those who already received benefits and reported from a week in arrears of Initial Claims data) also declined, falling 145,000 to 4.54 million, reflecting the lowest level since Mar. 21, 2020. Moreover, the four-week moving average for new claims dropped 33,500 to 823,000.
However, the total number of people receiving benefits across all program soared to 20.44 million, marking an increase of 2.5 million from prior week due to a acceleration in filings for two pandemic compensation programs, namely, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs.
Expectations of Large Fiscal Stimulus
The Democrats are moving forward with President Joe Biden’s proposed $1.9 trillion Covid-19 relief package. Weak labor market indicates that the U.S. economy is still suffering from coronavirus-led devastations and full recovery will take a long time. Consequently, investors' expectations have strengthened that the Congress will clear the path of President Biden's coronavirus-aid package in a law.
On Feb 10, the Fed chairman Jerome Powell said at the Economic Club of New York that the central bank will patiently pursue accommodative monetary policies as the labor market has a long way to go to achieve near full employment level that was prevailing at the onset of the outbreak of the pandemic.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Stock Market News for Feb 12, 2021
U.S. stock markets closed mostly higher on Thursday buoyed by strong earnings results and expectations of more fiscal stimulus. However, investors remained concerned about weaker-than-expected labor market data. The S&P 500 and the Nasdaq Composite ended in the green while the Dow suffered a marginal loss.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 7.1 points to close at 31,430.70. Notably, 13 components of the 30-stock index ended in the green while 16 in red and one remained unchanged. The blue-chip index has recorded a new all-time high of 31.543..82 in intraday trading. However, the Nasdaq Composite finished at 14,025.77, gaining 0.4% due to strong performance by large-cap tech stocks and marking a fresh closing high.
Meanwhile, the S&P 500 rose 0.2% to end at 3,916.38, reflecting a fresh closing high. The Energy Select Sector SPDR (XLE) tumbled 1.5% while the Technology Select Sector SPDR (XLK) gained 1.1%. Notably, seven out of eleven sectors of the benchmark index closed in the red and four in green.
The fear-gauge CBOE Volatility Index (VIX) was down 3.4% to 21.25. A total of 17.69 billion shares were traded on Thursday, higher than the last 20-session average of 15.96 billion. Decliners outnumbered advancers on the NYSE by a 1.08-to-1 ratio. On Nasdaq, a 1.22-to-1 ratio favored declining issues.
Impressive Fourth-Quarter Earnings Results So Far
As of Feb 10, 333 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 5.6% from the same period last year on 3.2% higher revenues, with 80.8% beating EPS estimates and 78.1% beating revenue estimates.
On Feb 11, Zebra Technologies Corp. (ZBRA - Free Report) came out with fourth-quarter 2020 earnings of $4.46 per share, beating the Zacks Consensus Estimate of $3.79. The company posted revenues of $1.31 billion for the quarter, surpassing the Zacks Consensus Estimate by 4.07%. (Read More)
Generac Holdings Inc. (GNRC - Free Report) came out with quarterly earnings of $2.12 per share, beating the Zacks Consensus Estimate of $1.96. The company posted revenues of $761.08 million for the quarter, outpacing the Zacks Consensus Estimate by 4.87%.( Read More)
Consequently, shares of Zebra Technologies and Generac Holdings soared 10% and 13.9%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Weaker-Than-Expected Labor Market Data
The Department of Labor reported that weekly jobless claims came in at 793,000 for the week ended Feb 6, higher than the consensus estimate of 763,000. Previous week's data was revised upward to 812,000 from 779,000 reported earlier. However, the data for the latest reported week was the lowest in five weeks.
Continuing claims (for those who already received benefits and reported from a week in arrears of Initial Claims data) also declined, falling 145,000 to 4.54 million, reflecting the lowest level since Mar. 21, 2020. Moreover, the four-week moving average for new claims dropped 33,500 to 823,000.
However, the total number of people receiving benefits across all program soared to 20.44 million, marking an increase of 2.5 million from prior week due to a acceleration in filings for two pandemic compensation programs, namely, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs.
Expectations of Large Fiscal Stimulus
The Democrats are moving forward with President Joe Biden’s proposed $1.9 trillion Covid-19 relief package. Weak labor market indicates that the U.S. economy is still suffering from coronavirus-led devastations and full recovery will take a long time. Consequently, investors' expectations have strengthened that the Congress will clear the path of President Biden's coronavirus-aid package in a law.
On Feb 10, the Fed chairman Jerome Powell said at the Economic Club of New York that the central bank will patiently pursue accommodative monetary policies as the labor market has a long way to go to achieve near full employment level that was prevailing at the onset of the outbreak of the pandemic.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>