Dow recovers losses, S&P 500 trades within striking distance of 5,000 mark

U.S. stocks were trying to shake off earlier losses Thursday afternoon, with the S&P 500 index on the verge of surpassing the 5,000-point level for the first time ever.

How stocks are traded

  • The Dow Jones industrial average

    rose 1 point, or less than 0.1%, to 38,680.

  • The S&P 500 Index

    it was less than 0.1%, at 4,994.

  • The Nasdaq composite

    rose 30 points, or 0.2%, to 15,786.

On Wednesday, the Dow Jones Industrial Average rose 0.4%, to 38,677; the S&P 500 rose 0.82, to 4,995; and the Nasdaq Composite gained 1%, to 15,757. U.S. stocks are on track to rise for the 14th of the last 15 weeks, on pace to match the best 15-week periods in history.

What drives the markets

Wall Street’s main stock barometer was on the verge of a major milestone after the S&P 500 ended Wednesday’s session just shy of surpassing 5,000 for the first time.

“It appears investors are determined to break above this 5,000 level, despite higher yields since this morning,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “It is the consistency of good profits that is pushing the market higher.”

The benchmark yield on 10-year Treasury bonds

rose 3 basis points to 4.15% on Thursday, nearly 30 basis points above its early February low, according to Dow Jones market data.

The S&P 500 set an intraday high of 4,999.89 on Wednesday and closed at a record 4,995.06. Thursday was shaping up to be a quieter session, with few catalysts available to drive the market beyond a handful of earnings reports, said Mike O’Rourke, chief market technician at JonesTrading.

O’Rourke said the market remains heavily dominated by the top, with the most valuable companies continuing to push the S&P 500 and Nasdaq higher. However, a rotation occurred as Tesla Inc. TSLA
and Apple Inc. AAPL,
two members of the “Magnificent Seven” group of mega-cap tech names have lagged the market in the new year.

This created space for companies like Eli Lilly & Co. LLY,
which recently saw its market capitalization surpass that of Tesla and enter the top eight most valuable US companies, according to FactSet data.

“You still see the market leaders continuing to push the market higher, but it’s not the same seven names,” O’Rourke told MarketWatch.

See: Stock market investors fear a megacap meltdown. Here’s what the story says.

The S&P 500 Index continued to rise in 2024, driven to all-time highs by corporate earnings optimism, a solid U.S. economic backdrop and the knowledge that interest rates likely won’t fall until the end of the year.

“Of course, as we approach the final innings of earnings season, the market is probably heading for some sort of pullback,” Spartan Capital’s Cardillo said.

“March is always a dark month for the stock market, too,” he said, adding that commercial real estate and regional banks also look like a looming problem — nearly a year after the collapse of three regional lenders, including Silicon Valley Bank, last March. .

Investors were focused on Walt Disney Co. DIS’s earnings results on Thursday,
released after Wednesday’s close, which added positivity, while there was a disappointing earnings update from PayPal Holdings Inc. PYPL
There was also a 20% rise in Arm Holdings Plc ARM shares
after the chip designer gave optimistic guidance and highlighted “the growing demand for new technologies driven by all things artificial intelligence.”

Much of the S&P 500’s 30% surge since Jan. 1, 2023 has been fueled by expectations that big tech companies like Microsoft Corp. MSFT
and Nvidia Corp. NVDA
can provide an AI-related earnings boost.

Thursday’s earnings were mixed, with oil exploration firm ConocoPhillips COP
shares are higher after beating expectations for profits and sales, while shares of uranium producer Cameco CCJ
and confectionery giant Hershey Co. HSY
collapsed after reporting the results and indications.

After the bell, investors will receive results from Affirm AFRM,
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and Expedia EXPE.

U.S. economic data released Thursday includes a weekly report on initial jobless claims, showing that the number of Americans filing for unemployment benefits during the first week of February fell by 9,000 to 218,000. The data indicates that layoffs remain extremely low, despite a flurry of headlines about layoffs at technology and media companies, among others. U.S. wholesale inventories rose 0.4% in December.

Companies in the spotlight

  • Under Armor Inc.
    shares rose after the apparel company reported a fiscal third-quarter profit that beat analysts’ estimates.

  • Community of New York Bancorp Inc.
    New York
    Shares fell again Thursday after an analyst downgraded the stock over fears that depositors might start fleeing.

  • Spirit Airlines Inc.
    Shares rose Thursday after the company reported a narrower-than-expected loss for the latest quarter, reporting encouraging booking trends and expressing confidence in its ability to return to profitability.

  • Wynn Resorts Ltd.
    Shares gained after the company posted fourth-quarter adjusted earnings that beat analysts’ expectations.

—Jamie Chisholm contributed to this article

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