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28 Jan 2021 | 15:30

US open: Stocks rally following sharp sell-off in previous session

(Sharecast News) - Wall Street stocks were firmly in the green at the open on Thursday following a heavy sell-off in the previous session and some better than expected jobless claims numbers. As of 1530 GMT, the Dow Jones Industrial Average was up 1.52% at 30,764.80, while the S&P 500 was 1.37% firmer at 3,802.31 and the Nasdaq Composite came out the gate 0.91% stronger at 13,391.24.

The Dow opened 461.63 points higher on Thursday, cutting into losses recorded in the previous session - its worst since October.

Earnings from Facebook, which beat on top and bottom lines in its fourth-quarter earnings overnight but cautioned that a reversal in Covid-19 pandemic trends would likely impact its advertising business, were in focus, as were worse-than-expected quarterly numbers from electric carmaker Tesla.

Apple also turned in its largest quarterly revenue performance in history overnight, bringing in $111.4bn and video game retailer GameStop's stock continued its vertiginous rise, hitting a 52-week high of $354.83.

Turning to Thursday's earnings slate, Mastercard stocks was on the rise after topping earnings expectations, while McDonald's earnings fell short of predictions on the Street as European lockdowns weighed on sales.

American Airlines surged despite posting a record quarterly loss as a result of chatter on the same Reddit forum that has sent GameStop shares through the roof in recent days and led the likes of Interactive Brokers and Robinhood to limit transactions for several heavily shorted names.

Still to come, Visa and Western Digital were both scheduled to report after the close.

Also in focus were comments from the Federal Reserve, which made it clear it was content on maintaining existing monetary policy. However, sentiment was still taking a hit even though the central bank vowed to continue supporting the economy.

On the macro front, America's economy continued expanding at the tail-end of 2020 with economists anticipating that the rebound from the Covid-19 crisis was set to continue. According to the Department of Commerce, US gross domestic product grew at an annualised pace of 4.0% over the three months ending in December (consensus: 4.1%).

The goods gap in the US narrowed to $82.5bn in December of 2020 from a revised $85.5bn in the previous month, an advance estimate from the Census Bureau showed, with exports increasing 4.6%, mainly boosted by sales of industrial supplies and imports rising at a slower 1.4%.

Elsewhere, the number of Americans filing for unemployment claims slipped again during the latest week. According to the Department of Labor, initial unemployment claims for the week ending on 23 January dropped by 67,000 from the week before to reach 847,000.

Still on data, new home sales rose for the first time in five months in December, topping off the best year for the market since 2006 amid record-low mortgage rates. Purchases of new single-family houses increased 1.6% to an 842,000 annualised pace in December, up from a downwardly revised 829,000 clip in the prior month, according to the Census Bureau.

Lastly, the Conference Board's leading index increased just 0.3% in December to 109.5, suggesting that US economic growth was continuing to moderate in the first quarter of 2021.
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