•   Saturday, 24 Feb, 2024
Tech stocks soar on Wednesday as market maintains momentum

Tech stocks soar on Wednesday as market maintains momentum

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Tech stocks soared for a second-straight day as all three major indexes added to gains after Tuesday's rally.

At the market close on Wednesday, the Nasdaq was up 1.6%, the S&P 500 was higher by 0.6%, and the Dow was up 0.2%.

This move followed a rally on Tuesday that saw the major U.S. indexes rise more than 2% across the board.

Leading the way higher Wednesday were many of the tech high-flyers that have been hit hardest this year.

Stocks like Unity Software and Shopify (SHOP) were up more than 12% on Wednesday, while shares of Coinbase (COIN) were also up more than 14% as broader crypto markets extended recent gains.

Investors also continue to remain focused on corporate earnings season, with results from Netflix (NFLX) after the close on Tuesday serving as first results this quarter from a major tech company.

Netflix reported a loss of 970,000 subscribers in the second quarter, fewer than the 2 million the company had expected to lose. This did, however, mark the second-straight quarter of declines at the streaming giant.

Shares of Netflix gained 7% on Wednesday, holding onto most of their gains from Tuesday's after hours session. Netflix shares gained as much as 10% on Tuesday evening, which investors had seen as a potential positive sign that "better than feared" results this earnings season will be rewarded by investors.

And even with investor fears around recession remaining elevated, expectations ahead of this quarterly earnings season have not been entirely re-written, as Nick Colas, co-founder at DataTrek Research, highlighted in a report out Tuesday.

The earnings calendar remains busy on Wednesday, with Biogen raising its full-year profit outlook in results reported before the opening bell. Shares of the company fell 5.8% on Wednesday.

Abbott Labs shares, meanwhile, were down 1.5% after the company reported a more than 7% drop in sales at its nutrition unit, which was hit by recalls of baby formula during the quarter. Abbott did, however, raise its full-year profit forecast.

Results from Tesla (TSLA) and United Airlines will feature after today's closing bell.

In a note on Wednesday, strategists at LPL Research led by Scott Brown noted the S&P 500 is up some 6% since June 16, even amid a rush of bad news.

Brown also noted that during Tuesday's trading session, breadth in the market — or the amount of stocks rising against the number falling — was the best it had been on the New York Stock Exchange since January 2019.

"The Tuesday reading saw advancers outnumber decliners by more than 14:1 on the NYSE, and that comes on the heels of a nearly 8:1 reading on Friday, which at the time was the best reading since May of this year," the firm wrote. Brown added that, "days like Tuesday are exactly what we are looking for, and can go a long way towards changing the character of this market."

Tuesday's rally in markets also came on the same day Bank of America Global Research published its latest fund managers survey, the firm's closely-watched gauge of investor sentiment.

The headline on this latest report said it all about the current state of markets — "I'm so bearish, I'm bullish."

BofA's report showed what strategist Michael Hartnett called a "dire level of investor pessimism," with expectations for profits and growth at all-time lows, investor equity allocations at the lowest levels since Lehman's collapse in 2008, and cash levels at the highest balances since 9/11.

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