Stock Market Recap: Thursday, Jan. 28, 2021

Wall Street rebounded as better-than-expected economic news offset slightly disappointing earnings announcements from Apple Inc. (Nasdaq: AAPL), Facebook Inc. (Nasdaq: FB) and Tesla Inc. (Nasdaq: TSLA) — and more in Thursday’s stock market recap. 

Meanwhile, bullish sentiment was helped by the recent comments from Federal Reserve Chair Jerome Powell. He provided further assurance that monetary policy will remain very accommodative for an extended period.

Stock Market Recap

The S&P 500 soared 1% after tagging a high of 3,830.

The Dow also rose 1% following the midday push to 30,951.

The Nasdaq was up 0.5% with the afternoon high of 13,507.

The Russell 2000 dipped 0.1% despite testing a morning peak of 2,138.

Financials and Materials were the strongest sectors after jumping 1.8% and 1.7%, respectively. There was no sector weakness.

Stock Market Movers

Shares of American Airlines Group Inc. (Nasdaq: AAL) were up 9% after announcing fourth-quarter earnings. The company reported a loss of -$3.86 a share on revenue of $4 billion versus forecasts for a loss -$4.11 on revenue of $3.88 billion. 

Stock Market Outlook 

Dow component Caterpillar Inc. (NYSE: CAT) will announce quarterly results before Friday’s opening bell. The company is expected to report a profit of $1.49 a share on revenue of $11.25 billion. The high estimate is at $1.77 a share with the low forecast at $1.26 a share and would equate to a 28-cent beat or a 23-cent miss.

The company has topped forecasts in three of the four quarters by 16, 39, -9 and 26 cents a share. There are 22 analysts that cover the stock with three Strong Buy ratings, six Buys, 11 Hold, and two Underperform recommendations.

Global Economy

From the global stock market recap, European markets closed mostly higher despite news that Germany’s health minister expects the shortage of coronavirus vaccines to continue well into April.

France’s CAC 40 gained 0.9% and the Belgium20 advanced 0.6%. Germany’s DAX 30 climbed 0.3% and the Stoxx 600 edged up 0.1%. The UK’s FTSE 100 fell 0.6%.

Asian markets closed lower across the board.

Hong Kong’s Hang Seng sank 2.6% while Australia’s S&P/ASX 200 and China’s Shanghai dropped 1.9%. South Korea’s Kospi gave back 1.7% and Japan’s Nikkei was off 1.5%. 

U.S. Economy

Initial Jobless Claims fell -67,000 to 847,000 versus the -13,000 decline to 914,000 previously. This left the four-week moving average at 868,000 after edging up to 851,750 previously. Continuing claims dropped -203,000 to 4,771,000 after falling -201,000 to 4,974,000 in the prior week.

Advance fourth-quarter GDP posted a 4% rate of growth versus the 33.4% clip in the third quarter. Personal consumption spending slowed to a 2.5% pace while fixed investment dropped to an 18.4% growth rate. Net exports subtracted -1.52% from growth. Inventories contributed 1.04% to growth while government spending continued to contract and was at -1.2%. The GDP price index posted a 2% increase versus the prior 3.5% clip, with the core rate slowing to 1.4% from 3.4%.

Stock Market Sentiment

The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was down for the second time in three sessions with the intraday low tagging $152.16. Current and upper support at $152.50-$152 was breached but held. A move below the latter would signal a retest towards $151-$150.50

Resistance is at $153.50-$154.

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) retreated following the intraday pullback to 27.39. Near-term and upper support at 27.50-27 was tripped but held. A close below the latter and the 200-day moving average would be a slightly bullish signal for the market with additional downside hurdles at 25.50-25.

Resistance is at 32.50-33 followed by 35.50-36.

Stock Market Analysis

The Invesco QQQ Trust (Nasdaq: QQQ) rebounded with the intraday high reaching $326.42. Current and lower resistance at $326-$326.50 was breached but held. A close above the latter would indicate a retest towards $327.50-$328.

Support is at $320-$319.50 followed by $318-$317.50.

RSI (relative strength indicator) is back in a slight uptrend with key resistance at 60 getting challenged but holding. A close above this level would signal additional strength towards 65-70 with the latter holding since early December. Support is at 55-50.

Sector

The Utilities Select SPDR Fund (NYSE: XLU) snapped a two-session slide after trading to an intraday high, reaching $63.44 and settling back above the 50-day moving average. Near-term and lower resistance at $63-$63.50 was cleared but held. A move above the latter would indicate a retest towards $64-$64.50.

Support is at $62-$61.50.

RSI is back in an uptrend with key resistance at 50 getting cleared and holding. Continued closes above this level would suggest additional strength towards 55-60 with the latter representing the monthly peak. Support is at 45-40.

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Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.