Stocks and index ETFs are attempting to gain momentum on Thursday, as investors examine a new collection of corporate earnings and economic data.
The Dow Jones Industrial Average gained 0.85%, while the S&P 500 advanced 0.65%. Meanwhile, the Nasdaq Composite climbed 0.67%.
Major stock ETFs are rallying on Thursday as well. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are all higher as of noon EST.
Investor sentiment was boosted by economic data Thursday, where a better-than-expected jobless claims report revealed a drop in first time claims. First-time claims for unemployment insurance reached 779,000 for the week ending Jan. 30, a figure that was beneath the 830,000 projection from economists surveyed by Dow Jones.
In addition, Thursday’s labor market data illustrated ‘further momentum’ in the economic recovery, “driving another blast of ‘risk-on’ into equities,” Charlie McElligott, equity derivatives strategist at Nomura, wrote in a note to investors.
Some Surprising Earnings Figures
Earnings results from some key retail merchants helped buoy stocks too. Online auction site eBay surged over 10% after smashing the top and bottom lines and issuing a better-than-expected forecast for Q1, as many individuals continue to sell their wares online amid the ongoing pandemic. eBay associate PayPal also rallied over 6% after robust quarterly results. PayPal earnings gained 29% to $1.08 an adjusted share, while revenue rose 23% to $6.12 billion. Meanwhile, the First Trust Nasdaq Retail ETF (FTXD) gained 1.75% amid the moves in the companies.
After a challenging prior week, stock ETFs have seen more positive sessions this week, as the benchmark averages pushed past speculative retail trading concerns. The Dow has added over than 3%, while the S&P 500 and the Nasdaq have gained 3.6% and 4.5%, respectively.
Volatility has been more placid as well, with the Cboe Volatility Index, known as the VIX, falling dramatically as the market recovered from last week’s losses. The fear gauge had surged to above 30 last week, but dropped back to roughly 23-24, posting its largest three-day decline ever, according to FundStrat.
“We believe that we are still in the early stages of a new bull market, transitioning from the ‘hope’ phase to a longer ‘growth’ phase as strong profit growth emerges,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said in a note.
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