Market News 07 FEB
Growth Amid Strong Earnings Reports
The U.S. stock market experienced a volatile trading session, with major indices fluctuating above and below previous closing levels. However, a late surge in buying, particularly in large-cap stocks, helped the S&P 500 and Nasdaq Composite close near their daily highs.
Market Movements: Key Events
On Thursday, the stock market broadly advanced, supported by strong corporate earnings reports. Notable gainers included companies that posted impressive financial results:
Tapestry (TPR) surged +12% on better-than-expected earnings per share ($2.00 vs. $1.75 consensus) and an upward revision of its annual forecast.
YUM! Brands (YUM) climbed more than +9% after reporting higher-than-expected quarterly sales growth.
Hershey Co. (HSY) gained +4%, demonstrating strong Q4 sales performance.
Despite a positive session close, market breadth remained weak: on the NYSE, declining stocks outnumbered advancing ones, while on the Nasdaq, the ratio stood at 11 to 10.
Top Gainers and Losers
Gainers:
Tapestry (TPR) — +12% to $82.20
Ralph Lauren (RL) — +9.7% to $273.14
Philip Morris (PM) — +11% to $145.32
Hershey (HSY) — +4.4% to $152.34
Amazon (AMZN) — +5.2% to $175.40
Losers:
Skyworks Solutions (SWKS) — -24.7% to $65.60 (due to weak earnings guidance)
Ford Motor (F) — -7.5% to $9.26 (after warning of a potential $2 billion profit decline)
Hologic Inc. (HOLX) — -10% (following a downward revenue forecast revision)
Molina Healthcare (MOH) — -10% (disappointing earnings report)
Honeywell International (HON) — -5% (weak 2025 sales outlook)
Macroeconomic Overview
U.S. economic data had a mixed impact on the market:
Jobless claims rose to 219,000 (above expectations of 213,000), indicating a slowdown in the labor market.
Non-farm productivity in Q4 increased by 1.2%, in line with forecasts.
Unit labor costs rose by 3.0% (lower than the expected 3.4%).
Treasury Secretary's comments on lowering bond yields provided market support.
The Chicago Fed President suggested potential rate cuts over the next 18 months but warned of fiscal policy uncertainties.
Forecasts and Expectations
On Friday, investors await the U.S. jobs report. Expectations are for 170,000 new non-farm payroll jobs in January, with the unemployment rate remaining at 4.1%. Average hourly earnings growth is projected to slow to 3.8% YoY.
Other key economic data for the day:
Nonfarm Payrolls (forecast: 155,000; previous: 256,000)
University of Michigan Consumer Sentiment (forecast: 71.3)
December Consumer Credit (forecast: $13.4 billion)
The market remains volatile, but strong corporate earnings continue to bolster investor confidence. Growth in the tech and consumer sectors suggests further market strengthening potential, while weak macroeconomic data and Fed comments create uncertainty. Friday's employment report could be a key factor in setting the market's direction for the upcoming week.