The stock market erased early losses to post moderate gains by shortly after midday, after new economic figures showed a worse-than-expected GDP drop in the second quarter. facebook-parent Meta Platforms‘ (META) earnings put a damper on the stock market while Ford (F) earnings gave it a lift.
The Nasdaq composite gained 0.5% while the S&P 500 rose 0.6% by noon Eastern. The Dow Jones Industrial Average rose 0.6%. Pink volume on the Nasdaq and the NYSE vs. the same time on Wednesday. The small-cap Russell 2000 index gained 0.8%.
Second-quarter GDP-Advance dropped 0.9%, missing estimates that called for a slight rise, and falling for a second straight quarter. GDP contracted 1.6% in the first quarter. A second straight quarterly decline meets the common definition of a technical recession. Meanwhile, first-time jobless claims unexpectedly rose to 256,000 vs. 251,000 in the previous week.
US Stock Market Today Overview
Last Update: 12:02 PM ET 7/28/2022
“While it seems inaccurate to consider the US economy in recession in the first half of the year, the outlook is dire,” said Bill Adams, chief economist for Comerica Bank. “Leading indicators of the business cycle keep getting worse. The Conference Board’s Leading Economic Index points to a likely recession, as do the yield curve, rising unemployment insurance claims, and falling business and consumer confidence.”
Stock Market Torn By Mixed Earnings
The 10-year US Treasury yield continued to slide Thursday, falling 1 basis point to 2.68% while the price of crude oil rose to $98.14 a barrel.
Meta reported second-quarter results late Wednesday that missed earnings estimates and also reported a slight quarterly decline. It was the first time Meta reported a quarterly decline for both earnings and revenue from the year-ago period.
The company reported adjusted earnings of $2.46 a share on revenue of $28.8 billion. Analysts expected Meta to report earnings of $2.54 a share on revenue of $29 billion, according to FactSet. Shares slide more than 5% by midday.
Ford Motor shares raced 4.6% higher after the company reaffirmed its 2022 outlook and hiked the dividend after crushing earnings estimates for the second quarter.
Qualcomm (QCOM) beat Wall Street’s targets for its fiscal third quarter but came up short with guidance for the current quarter, causing a 4% skid for QCOM stock.
defense contractor Northrop Grumman (NOC) shares gained 1.2% after the company reported second-quarter earnings. It fell short on earnings predictions and revenue estimates for the quarter, but reconfirmed 2022 guidance. NOC anticipates full-year revenue of $36.2 billion to $36.6 billion on earnings of $24.50 to $25.10 per share.
Solar Stocks Get Boost From Proposed Legislation
Spirit Airlines (SAVE) stock jumped 3.5% on Thursday after it agreed to combine with JetBlue (JBLU) in a $3.8 billion deal. The accord follows months of rancor between the carriers and frontier (ULCC), whose own bid for Spirit fell apart a day earlier. The airlines said that their boards of directors have approved a definitive merger agreement under which JetBlue will acquire Spirit for $33.50 per share in cash.
Solar stocks soared in Wednesday’s post-market trading after Senator Joe Manchin (D-WV) announced an agreement with Senate Majority Leader Chuck Schumer (D-NY) to support broad-ranging energy legislation. The Inflation Reduction Act of 2022 proposes, among other things, investment in all fuel types, including fossil fuels.
Quanta Services (PWR) rallied 4% Thursday into the 138.56 buy point of a cup-with-handle base.
Enphase Energy (ENPH) soared more than 5%. The stock is extended above its buy point of 193.
Enphase was also one of the top movers on the IBD 50, as the Innovator IBD 50 ETF (FFTY) gained 1.2%.
Follow Michael Molinski on Twitter @IMmolinski
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