US stocks hold gains in choppy trade after Facebook parent’s results; GDP disappoints

U.S. stocks tried to hold on to early gains on Thursday, with the Nasdaq Composite briefly dipping into negative territory after a jump that followed results from parent Facebook meta platforms that weren’t as bad as expected.

Investors also initially brushed off data that showed the US economy contracted unexpectedly in the first quarter.

What is happening

The Dow Jones Industrial Average
DJIA

rose 149 points, or 0.4%, to 33,451, after briefly dipping into negative territory by mid-morning.

The S&P 500
SPX

rose 34 points, or 0.8%, to 4,218.

The Nasdaq Composite
COMP

advanced 118 points, or 0.9%, to 12,607, after also briefly trading in negative territory.

On Wednesday, the Dow Jones rose 62 points, or 0.2%, while the S&P 500 gained 0.2% and the Nasdaq Composite failed to rebound, ending the day with a loss of less than 0.1%.

The S&P 500 is down 6.8% for April, heading for its biggest monthly decline since March 2020. The Nasdaq Composite has lost nearly 11% since early April and is on course for its worst monthly performance since October 2008. The Dow Jones has lost about 4% so far in April.

What drives the markets?
Major indices opened with strong gains linked to meta platform results
Facebook.

Although they weren’t far ahead of the consensus, with earnings actually weaker than expected, expectations were low given the stock’s 48% decline this year. The shares remained up 11%.

Meta’s higher-than-expected subscriber count paves the way for two more megacap tech stock results expected after Thursday’s close, Amazon.com
AMZN

and apple
AAPL.

Although Amazon’s stock market decline was not as severe as Meta’s, its stock is only 2% above its 52-week intraday low.

Investors were also eyeing a first look at first-quarter economic growth, with gross domestic product showing an annualized contraction of 1.4% after expanding 6.9% in the last quarter of 2021. Economists polled by The Wall Street Journal had forecast growth of 1%, but some had warned of the possibility of a negative figure.

“It is likely that future adjustments will improve the number, but this has dampened the enthusiasm generated by the positive earnings announcement this week,” Louis Navellier, president of Navellier and Associates, said in a note.

As economists had warned, the decline was mainly due to a record international trade deficit, lower government spending and falling inventories, but robust consumer spending and business investment signaled that the economy continued to grow at a steady pace.

Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, said the data should always serve as a warning to investors.

“With the Fed beginning to aggressively raise interest rates, stock and bond markets have already been shaken. They have regained their footing and there is plenty of reason to be optimistic in terms of corporate earnings growth, corporate balance sheets and resilient consumption, but all of that can change quickly, so it’s important to be prepared for a wider range of outcomes over the next 1-2 years,” he said in comments. by e-mail.

The yen
USDJPY

meanwhile, it fell to a new 20-decade low after the Bank of Japan failed to change its accommodative monetary policy.

To see: Dollar dominance continues as yen slumps to two-decade low

Which companies are targeted?
Shares of Teladoc Health Inc.
TDOC

fell 47% after telemedicine company downgrades its outlook for the full year.

McDonald’s Corp.
MCD

shares rose 1.2% after beating expectations on earnings and income.

Merck
M.K.R.

shares rose after the pharmaceutical company upper estimates for the first quarter, buoyed by more than $3 billion in sales of its COVID-19 antiviral.

Southwest Airlines Stocks
LUV

climbed after the airline reported a bigger-than-expected loss in the first quarter, but income above expectationsamid a “strong rebound” in March.

caterpillar
CAT

rose after construction and mining equipment manufacturer blow past estimates for the first trimester.

other assets
The return on the 10-year treasury bill
BX:TMUBMUSD10Y

rose 4.7 basis points to 2.854%. Yields and debt prices move in opposite directions.

Oil futures rose, with the US benchmark
CL

up 1.6% to $103.67 a barrel. Gold Futures Contracts
GC00

edged up 0.2% to trade below $1,886 an ounce.

Bitcoin
BTCUSD

edged down 0.2% to trade above $39,100.

The Stoxx Europe 600
XX:XXXP

rose 0.2%, while London’s FTSE 100
UK:UKX

advanced by 0.8%.

The Shanghai composite
CN:SHCOMP

rose 0.6%, while the Hang Seng Index
Hong Kong: HSI

jumped in the Nikkei 225 of Hong Kong and Japan
JP: NIK

each jumped 1.7%.