Stocks rose for a fourth straight day Wednesday, as Alphabet propelled gains in tech thanks to strong quarterly earnings.
The S&P 500 rose 0.9% to 4,589.36. The Dow Jones Industrial Average jumped 224 points, or 0.6%, to 35,629.33. The tech-heavy Nasdaq Composite climbed 0.5% to 14,417.55.
“Emotion is winding down and greed is replacing fear – fear of missing out on a post correction rally is starting to become a more powerful emotion than the fear that it might go down more if you stay in,” said Leuthold Group chief investment strategist Jim Paulsen.
“People are starting to decide that maybe last Monday’s low was the low for the correction,” he added. “We’ve had good reminders that fundamentals are good with earnings reports, they started with financials but have gotten a lot better since.”
Big tech names, which led the market sell-off in January, have been key drivers of the four-day rebound as investors refocused their attention on earnings season, after mega cap tech companies continued reporting strong quarterly results and forward guidance.
Shares of Google-parent Alphabet popped more than 7.3% after its quarterly numbers topped analyst expectations. The company reported a quarterly beat on the top and bottom lines and announced a 20-for-1 stock split.
Chipmaker Advanced Micro Devices gained 5% on strong earnings and guidance. Qualcomm rose 6.2% ahead of its quarterly earnings report after the closing bell. Match Group rose 5.2% after the company posted a jump in profits that beat analysts’ estimates.
Facebook parent Meta Platforms, which is also scheduled to report earnings after the closing bell, added 1%. Microsoft rose 1%.
“Technology companies were some of the hardest hit in January, as investors feared higher interest rates would expose their lofty valuations and raise their operating costs,” said Jeff Kilburg, chief investment officer at Sanctuary Wealth. “After a dramatic pullback in the tech sector, investors bargain hunted some tech names that had been battered all January.”
Elsewhere, General Motors shares dipped after coming up light on quarterly revenue, despite beating earnings estimates and raising its 2022 forecast.
PayPal slid 24% after issuing disappointing guidance for the current quarter, which it blamed on inflation. Starbucks dipped slightly after the company reported a quarterly earnings miss and cut its earnings outlook for fiscal 2022.
Earnings season continues on Wednesday with key reporting from Meta Platforms and Qualcomm. AbbVie, D.R. Horton and T-Mobile will also report earnings Wednesday.
On the economic front, private payroll data fell by 301,000 for the month of January, which was down from December’s growth of 807,000 private payrolls, ADP reported Wednesday. Economists polled by Dow Jones were expecting 200,000 private jobs were added in January.
The major averages are coming off of a volatile month, mainly spurred by a pivot in the Federal Reserve. However, some Fed members have offered reassuring commentary that they do not want their pending rate hikes to disturb the financial markets and that few see any appetite for a 50 basis point hike.
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