Stock Market Today Mid-Morning Updates
On Thursday, the Dow Jones Industrial Average is up by 130 points as investors look ahead to more earnings reports and new weekly jobless claims by the U.S. Labor Department. This comes after the tech-heavy Nasdaq finished in correction territory, down more than 10% from its record high in November. Investors are likely responding to rising bond yields that make it more expensive for companies to borrow to fund growth.
Just in, McDonald’s (NYSE: MCD) is expanding its test of the plant-based McPlant burger that was created with Beyond Meat (NASDAQ: BYND). Beginning on February 14, the company will roll out the alternative meat burger at roughly 600 locations across San Francisco Bay and Dallas-Fort Worth areas. The idea is to learn more about consumer demand for the new burger as it approaches the plant-based meal trend. In other news, Dr. Anthony Fauci says that the FDA could approve Pfizer’s (NYSE: PFE) Covid vaccine for children under 5 years old next month.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.54% today while Microsoft (NASDAQ: MSFT) is also up by 1.52%. Home Depot (NYSE: HD) and Nike (NYSE: NKE) ticked higher on Thursday. Among the Dow 30, financial leaders like Visa (NYSE: V) and Goldman Sachs (NYSE: GS) are trading higher at 1.01% and 0.33%.
Shares of electric vehicle (EV) leader Tesla (NASDAQ: TSLA) are is up 1.92% on Thursday. Rival EV companies like Rivian (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) are also up by 2.41% and 4.55% today. Chinese EV leaders like Li Auto (NASDAQ: LI) and Xpeng Motors (NYSE: XPEV) are trading higher at 3.62% and 2.40% respectively.
Dow Jones Today: Treasury Yields And Jobless Claims Unnerving Investors?
Following the stock market opening on Thursday, the S&P 500, Dow Jones, and Nasdaq are trading 0.48%, 0.38%, and 0.97% higher. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 1.10% on Thursday, while the SPDR S&P 500 ETF (NYSEARCA: SPY) is up by 0.47%.
Today, the yield on the benchmark 10-year Treasury note continues to hover above 1.8%. This is after topping 1.9% on Wednesday, which marks the highest level since January 2020. Investors would need to normalize the new highs in rates. This appears to be the case as the Fed reigns in rising inflation and also tapers off pandemic-era economic measures. As governments around the world are learning to live with the pandemic, they are less likely to implement strict lockdowns that could hamper a recovering economy.
The Labor Department also released its latest jobless claims report on Thursday at 8:30 a.m. ET. Diving in, new jobless claims unexpectedly jumped last week by the most since October at 286,000. This compared to the consensus estimate of 225,000. Continuing claims also rose to 1.635 million from a revised 1.551 million during the prior week. This unexpected spike could be due to impacts from the Omicron variant. However, given the persistent labor shortages across the country, the trend in layoffs should be on the downward side.
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Alibaba And JD.com Among Other Chinese Tech Stocks Surge As China Reduces Lending Rates
Shares of Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) are surging in the stock market today. For the most part, this could be on account of the latest update from China’s central bank. Namely, the People’s Bank of China (PBOC) is reducing its one-year loan prime rate (LPR) by 10 basis points. This would translate to a decrease from 3.8% to 3.7%. By extension, the PBOC lowering LPRs could lighten the burden for both corporate and household loans in China. As such, Chinese tech stocks alongside property firms are on the rise now.
Overall, this seems to be a much-needed breath of fresh air for Chinese tech stocks. With essentially lower interest rates on their loans, some would argue that the sector received a notable boost today. Evidently, BABA stock and JD stock are currently trading higher by 4.22% and 6.78% respectively. At the same time, companies such as Weibo (NASDAQ: WB), Tencent (OTCMKTS: TCEHY), and Baidu (NASDAQ: BIDU) are also in the green today. The real question now is whether or not these industry leads can maintain their respective gains.
Overall, it is important to note that Chinese tech stocks are likely leading the pack amidst a downturn in the broader tech sector. Alternatively, some of the top domestic tech players are, arguably, trading at a more attractive valuation now as well. However you look at it, investors have plenty of options to choose from in the stock market today when it comes to the tech space.
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Airline Stocks Trade Lower Despite Earnings Beat
Meanwhile, there is a new set of earnings data coming out from the airline industry today as well. Notably, the likes of American Airlines (NASDAQ: AAL) and United Airlines (NASDAQ: UAL) are in focus now. For starters, AAL is looking at a quarterly loss of $1.42 per share. This would be better than consensus estimates of a $1.48 per share loss from Wall Street. Additionally, the company raked in a total revenue of $9.43 billion throughout its fourth quarter, also topping estimates. By and large, AAL cites strong holiday demand for flights as a core growth driver for the quarter.
Following that, United also posted similar results in its latest earnings call. Earlier today, the airline operator posted a loss of $1.60 per share on revenue of $8.19 billion. Likewise, it topped estimates on both of these fronts. In particular, Wall Street was expecting a loss per share of $2.11 for United.
Speaking about the company’s current operating environment this year is CEO Scott Kirby. Kirby notes, “While Omicron is impacting near term demand, we remain optimistic about the spring and excited about the summer and beyond. We look forward to beginning to return the Pratt & Whitney 777s to service this quarter and getting the full airline back to normal utilization — as we ramp up along with demand this year.” Despite all of this, both AAL stock and UAL stock are trading lower by 3.09% and 2.00% respectively.
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