Dow Jones Industrial Average rallies more than 200 points on Boeing and Apple results

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January 30, 2019 11:25am INDEXDJX:.DJI NYSE:DIA

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From Chris Matthews and Barbara Kollmeyer: U.S. stocks surged Wednesday morning, with the Dow powered higher by Boeing earnings, and as technology shares got a boost from better-than-expected quarterly results from Apple and Advanced Micro Devices.

Investors will continue to parse another round of earnings reports Wednesday, as they await the outcome of a Federal Reserve’s meeting and the start of U.S.-China trade talks.

How are benchmarks faring?

The Dow Jones Industrial Average DJIA, +1.34% rose 222 points, or 1%, to 24,835, while those for the S&P 500 index SPX, +0.74% were up 15 points, or 0.6%, to 2,656. The Nasdaq Composite Index COMP, +0.96% climbed 70 points, or 1%, to 7,095.

And: Stock-market investors should brace for a plunge in business investment, analysts warns

What’s driving the market?

At the fore of investors minds will be the outcome of the Fed’s two-day policy-setting meeting with Chairman Jerome Powell expected to hold a news conference to discuss the central bank’s plans on Wednesday 2:30 p.m. Eastern Time. The Fed will now hold Q&A’s after every policy meeting.

Market participants will be looking for any insights from the central bank over its pace of rate increases and reduction of the central bank’s balance sheet, given how concerned investors have been over the pickup in the pace of those processes.

Thus far, investors have embraced a series of earnings reports, starting with Tuesday evening reports from Apple IncAAPL, +5.12% and Advanced Micro Devices IncAMD, +16.36% and continuing with Boeing Co. BA, +6.55%Wednesday, with the industrial giant issuing an upbeat outlook for 2019 and far surpassing analysts’ revenue expectations, providing a further fillip to Wall Street sentiment.

Technology and internet-related stocks appeared set to rally after Apple produced results that weren’t as bad as feared, though the iPhone maker saw a sharp decline in revenue for the holiday quarter and a weaker-than-expected sales outlook for the current quarter.

Market participants have taken the results in stride, given an earlier warning from CEO Tim Cook and appeared to focus on improving performance in the tech giant’s services business. Gains in the broader tech market also were bolstered by a sharp gain for Advanced Micro Devices following an upbeat forecast.

Meanwhile, U.S.-China trade talks will resume Wednesday against the backdrop of a tough stance by the White House administration over Huawei, after federal prosecutors accused it of violating U.S. sanctions on Iran and of intellectual property theft. The latter is a key issue that the Trump administration has raised with China as it attempted to resolve a protracted trade dispute with the Asian country. Huawei has denied the allegations.

Which stocks are in focus?

Apple stock is up 4.9% early Wednesday.

Advanced Micro Devices shares have risen 14.7% Wednesday morning.

AT&T shares are down 4%, after the telecom giant fell short of Wall Street estimates for fourth-quarter revenue.

Shares of Boeing are up 5.5% early Wednesday.

Shares of McDonald’s CorpMCD, +2.73% are trading 1.5% higher, after the fast-food giant beat fourth-quarter earnings expectations, but fell short of revenue forecasts.

Alibaba Group Holding Ltd. BABA, +5.81% stock is up 3.9%, after the e-retailer beat analysts expectations for fiscal third-quarter earnings, but fell short of revenue targets.

Shares of Tupperware Brands Corp. TUP, -28.15%  are tumbling more than 8% after the firm reported fourth-quarter revenue below expectations.

Microsoft Corp. MSFT, +1.77% Tesla Inc. TSLA, +1.01% Qualcomm Inc.QCOM, +0.34% Mattel Inc. MAT, -0.33% and Visa Inc. V, +0.87% are scheduled to report after the close.

Read: Investors are interpreting the dramatic slowdown in corporate earnings all wrong

What are the analysts saying?

“Big earnings from Apple last night after the close and Boeing this morning have pushed the Dow futures sharply higher,” wrote Paul Hickey of Bespoke Market Intelligence, in a Wednesday research note.

“While the gains aren’t as large in the S&P 500 and Nasdaq, they are also both pointing in the right direction for bulls. Now, all we have to do is get through this afternoon’s rate decision from the FOMC and the subsequent press conference,” with investors hoping that Chair Powell continues to reinforce perceptions that the Fed will very cautious with any future rate hikes, he argued.

What data are ahead?

The private sector added 213,000 jobs in January, according to a report from payroll firm ADP. That’s above the consensus estimate of 178,000 new jobs, according to FactSet.

The ADP report is not as closely watched as the Labor Department’s jobs report, and it often varies significantly from the official government number. Still, economists use the ADP figures to inform their predictions for the official report, due on Friday.

Investors will get a snapshot of the U.S. real estate market when the National Association of Realtors issues its estimate of pending home sales at 10 a.m. Eastern Time.

The government’s estimate of fourth-quarter GDP growth was to be issued today but will be delayed due to the lingering effects of the government shutdown.

How did U.S. stocks perform yesterday?

In Tuesday trade, the Dow rose 51.74 points, or 0.2%, to 24,579.96, while the S&P 500  slid 3.85 points, or 0.2%, to 2,640, and the Nasdaq Composite Index fell 57.39 points, or 0.8%, to 7,028.29.

How were other markets trading?

Stock markets in Asia finished mixed, with the Shanghai Composite IndexSHCOMP, -0.72%  dropping 0.7% and Hong Kong’s Hang Seng Index HSI, +0.40%rising 0.4%.

In Europe, the FTSE 100 index UKX, +1.38%  was up close to 1%, while the Stoxx Europe 600 SXXP, +0.17%  was flat.

Crude oil CLH9, +2.40% was higher, while gold prices GCH9, +0.11% edged upand the U.S. dollar DXY, +0.07% gained 0.1%.

The SPDR Dow Jones Industrial Average ETF (DIA) was trading at $248.34 per share on Wednesday morning, up $2.63 (+1.07%). Year-to-date, DIA has gained 1.22%, versus a -0.39% rise in the benchmark S&P 500 index during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #4 of 82 ETFs in the Large Cap Value ETFs category.

This article is brought to you courtesy of MarketWatch.

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