Dow Jones – Stock Market News for Jan 29, 2021

U.S. stock markets closed higher on Thursday, recovering some of the sharp losses from the previous session. Several better-than-expected earnings reports as well as falling initial jobless claims helped in boosting investors’ sentiment. All the three major stock indexes ended the day in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 1%, or 300.19 points, closing at 30,603.36, reversing its five-day losing streak. Notably, 21 components of the 30-stock index ended in green while 9 finished the day in red.

The tech-heavy Nasdaq Composite closed the day at 13,337.16, up 0.5%, snapping its two-day losing streak, on the back of strong performance by large-cap technology stocks. The S&P 500 gained 1%, closing the day at 3,787.38, terminating two successive days of losses. The Financials Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) advanced 1.9% and 1.7%, respectively. Notably, all eleven sectors of the benchmark index closed in the positive zone.

The fear-gauge CBOE Volatility Index (VIX) was down 18.8% to 30.21. A total of 19.58 billion shares were traded on Thursday, higher than the last 20-session average of 14.86 billion. Advancers outnumbered decliners on the NYSE by a 2.22-to-1 ratio. On Nasdaq, a 1.26-to-1 ratio favored advancing issues.

Upbeat Earnings

Abiomed, Inc. ABMD came out with quarterly earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.15 per share. This compares to earnings of $1.11 per share a year ago. (Read More)

United Rentals, Inc. URI came out with quarterly earnings of $5.04 per share, beating the Zacks Consensus Estimate of $4.28 per share. (Read More)

MKS Instruments, Inc. MKSI came out with quarterly earnings of $2.34 per share, beating the Zacks Consensus Estimate of $2.03 per share. This compares to earnings of $1.20 per share a year ago. (Read More)

Consequently, shares of Abiomed, United Rentals and MKS Instruments rose 8.1%, 7.3% and 0.9%, respectively. Notably, United Rentals carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Jobless Claims Fall

The U.S. Department of Labor reported that initial jobless claims declined by 67,000 to 847,000 for the week-ended Jan 23. The consensus estimate was 882,000 and previous week’s data was revised upward by 14,000 to 914,000 from 900,000 reported earlier.

Continuing claims (people who are already receiving benefits) declined by 203,000 to 4,771,000 for the week ended Jan 16 from the prior week which was revised downward by 80,000 to 4,974,000 from 5,054,000 reported earlier. The four-week moving average for continuing claims dropped by 106,750 to 4,998,000 from the prior week’s average which was revised downward by 21,500 to 5,104,750 from 5,126,250 reported earlier.

Other Economic Data

The growth of the U.S. economy moderated in the fourth-quarter 2020 after jumping to a record high of 33.4% in the third quarter. Notably, the U.S. Department of Commerce reported that the GDP increased at an annual rate of 4%, falling short of the Zacks Consensus Estimate of 4.4%. For 2020, GDP decreased 3.5%, compared to an increase of 2.2% in 2019. Meanwhile, personal consumption expenditure increased 2.5% annually in the fourth quarter, after increasing 41% in the third quarter.

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that the sales of new single-family houses in December 2020 increased 1.6% to a seasonally adjusted annual rate of 842,000, compared to the revised November rate of 829,000, missing the consensus estimate of 874,000. For 2020, an estimated 811,000 new homes were sold, an increase of 18.8% compared to the 2019 figure of 683,000.

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