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Stock Market News for Apr 28, 2023

U.S. stock markets closed sharply higher on Thursday following strong earnings results by big techs. Mixed economic data also strengthened market participants’ confidence as investors expect the Fed is nearing to the end of higher interest rate regime. All three major stock indexes rallied impressively.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) surged 1.6% or 524.29 points to close at 33,826.16. Notably, 26 components of the 30-stock index ended in positive territory and 4 in negative zone. The blue-chip index recorded best single-day performance since January.

The tech-heavy Nasdaq Composite finished at 12,142.24, jumping 2.4% or 287.89 points due to strong performance of large-cap technology stocks. The tech-laden index registered best single-day performance since March.

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The S&P 500 climbed 2% to end at 4,135.35, marking its best single-day performance since January. All 11 broad sectors of the benchmark index closed in positive territory. The communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Real Estate Select Sector SPDR (XLRE) and the Technology Select Sector SPDR (XLK) advanced 5.8%, 2.6%, 2.4% and 2.1%, respectively.

The fear-gauge CBOE Volatility Index (VIX) was down 9.6% to 17.73. A total of 10.77 billion shares were traded on Thursday, higher than the last 20-session average of 10.41 billion. Advancers outnumbered decliners on the NYSE by a 3.26-to-1 ratio. On Nasdaq, a 1.89-to-1 ratio favored advancing issues.

Strong Earnings Results

Social Media behemoth Meta Platforms Inc. META reported first-quarter 2023 earnings of $2.20 per share, beating the Zacks Consensus Estimate by 34.69%. Revenues of $28.65 billion beat the Zacks Consensus Estimate by 4.21% and increased 2.6% year over year. At constant currency (cc), the top line improved 6%.

Monthly active users (MAUs) were 2.99 billion, up 1.8% year over year. Daily Active Users (DAUs) were 2.04 billion, which increased 3.9% year over year and represented 67% of MAUs. Management expects total revenues between $29.5 billion and $32 billion for the second quarter of 2023. However, unfavorable forex is expected to hurt year-over-year top-line growth by less than 1%.

Consequently, stock price of Meta Platforms soared 13.9%. Meta Platforms currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cable TV and Film Studio giant Comcast Corp. CMCSA reported first-quarter 2023 adjusted earnings of $0.92 per share, beating the Zacks Consensus Estimate by 15% and increasing 7% year over year. Consolidated revenues declined 4.3% year over year to $29.69 billion.  However, top line surpassed the Zacks Consensus Estimate by 1.59%.

Comcast added 5K broadband customers compared with 264 in the year-ago quarter. Moreover, it added 355 wireless customers but lost 614 video customers in the reported quarter. As a result, shares of Comcast jumped 10.3%.

Economic Data

The Department of Commerce reported that the U.S. GDP grew at 1.1% in first-quarter 2023 compared with 2.6% in fourth-quarter 2022. The consensus estimate was 2.1%. Consumer spending remained resilient at 3.7%.

The personal consumption expenditure price Index (PCE inflation) increased 4.2% in first-quarter 2023, higher-than the consensus estimates of 3.7%. The core PCE inflation (excluding volatile food and energy items) surged 4.9% in last quarter, compared with 4.4% in fourth-quarter 2022.

The National Association of Realtors reported that pending home sales declined 5.2% in March, marking its first monthly decline since November 2022. The consensus estimate was for an increase of 0.5%. Pending home sales increased 0.6% in February.

The Department of Labor reported that weekly jobless claims decreased 16,000 to 230,000 for the week ended Apr 22, lower than the consensus estimate of 249,000. Previous week’s data was revised marginally upward from 245,000 to 246,000.

Continuing Claims (those who already received government benefit) for the week ended Apr 15, came in at 1.858 million — a decrease of 3,000 from downward revision of 1.861 million in the previous week.

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