Technology companies lead stocks higher on Wall Street

Technology companies lead stocks higher on Wall Street

Big tech led U.S. stocks to a higher close on Thursday, modestly building on a two-day rally as lackluster economic data and mixed corporate earnings prompted a pivot back to growth stocks.

The Dow Jones Industrial Average rose 25.35 points, closing at 34,823.35. The S&P 500 climbed 0.2% higher, reaching 4,367.48. The tech-heavy Nasdaq Composite led the markets with a 0.3% gain, ending the day at 14,684.60.

Investors jumped back into their favorite tech stocks as optimism about the sector grows ahead of big earnings reports next week for some of the largest names in the space. Salesforce gained 2.5% while Amazon and Facebook climbed 1.4% higher.

Microsoft rose 1.6% after Citi raised its price target, saying the tech giant has the potential to beat Wall Street expectations when it reports quarterly earnings next week. Citi predicted the stock will rise more than 30% over the next year. Apple rose almost 1% after Canaccord Genuity said there was “strong demand” for Apple products ahead of its earnings next week.

The Dow is up 0.3% on the week and sits less than 1% from a record high, bouncing back from a 700-point-plus rout on Monday.

Market participants are closely watching labor market indicators for hints as to when the Federal Reserve, expected to convene next week for its two-day monetary policy meeting, will begin discussions about hiking key interest rates from near zero.

The 10-year Treasury yield ticked lower to 1.265% on the poor jobs data. The rate dropped to a 5-month low of 1.17% earlier in the week.

Bank stocks, which are typically viewed as cyclical stocks whose performance is tied to the path of the economy, were down with JPMorgan, Bank of America and Wells Fargo shedding more than 1% each.

Damon Harrison
Market Analyst, IPG Group