The week saw investors digest a batch of corporate quarterly reports, and the Dow Jones Industrial Average finish at 35,089.74 up 398.31 (1.15%), the S&P 500 at 4,500.53 up 68.74 (1.55%), while the Nasdaq 100 close at 14,694.35 up 189.29 (1.30%) in part driven by the performance of Amazon stock (covered below).
While by the end of the week indices were positive, it was a struggle getting there. On Thursday, the Nasdaq Composite, heavily weighted in technology fell 3.7%, the Dow Jones was down 519 points, or 1.5%, while the S&P 500 fell 2.4%. With Thursday’s drop, the Nasdaq is down around 14% from its all-time high in November and the S&P 500 is down about 7% from it’s all-time high in early January. Despite the positive end to the week, stock investors will be concerned with how poorly the year has started.
Yields are increasing – the 10-year Treasury yield ticked up to 1.83% on Thursday which was on top of the 1.78% on Wednesday. To combat inflation, the Federal Reserve is anticipated to hike interest rates multiple times this year, beginning in March, and shrink its asset holdings. Higher bond yields diminish the value of future profits, which is bad for tech stocks because many fast-growing tech businesses expect a large portion of their revenues to come many years down the road.
Amazon (NASDAQ: AMZN) posted a fourth-quarter profit above forecasts, thanks in part to its investment in electric vehicle company Rivian (RIVN). Because of its investment in Rivian, the company’s net income virtually doubled last quarter compared to the same period the prior year (RIVN). In the fourth quarter of 2020, Amazon recorded a net income of $14.3 billion, up from $7.2 billion in the same period the previous year. In the fourth quarter, net sales grew by 9% to $137.4 billion, up from $125.6 billion the year before. Amazon’s Web Services division generated $17.78 billion in sales for the quarter, compared to the $17.23 billion expected.
After the social media behemoth issued a bleak prediction, blaming Apple Inc's privacy reforms and greater competition, shares of Facebook owner Meta dropped 26% on Thursday, the greatest single-day drop in market value for a US corporation. After the social media behemoth issued a bleak prediction, blaming Apple Inc's privacy reforms and greater competition, shares of Facebook owner Meta dropped 26% on Thursday, the greatest single-day drop in market value for a US corporation.
After hitting a low of 17.77 cents per pound on January 10, March, raw sugar settled up -0.165% at 18.20 cents per lb. Healthy harvests outside of Brazil are battering sugar. However, dealers warn that it is unlikely to fall below 17.50 cents in the near term. It is still unclear how much of the top producer Brazil's incoming crop has recovered from last year's poor weather. There was little selling in the market from producing countries, speculators were also hesitant to buy after sugar failed to break above 18 cents.