Technology giants Amazon.com (NASDAQ:AMZN), Google’s parent company, Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT) led the U.S. stock market rally today.
Investors were encouraged by the tech giants’ quarterly financial performance, which exceeded the expectations of Wall Street analyst.
Today, the Dow Jones added 0.90% to 17,646.97 points, the S&P 500 climbed 1.10% to 2,075.15 points, and the NASDAQ increased 2.27% to 5,031.86 points. The Russell 2000 went up 1% to 1,166.06 points.
Vincent Delisle, portfolio strategist at Scotia Capital told Bloomberg that the outperformance of the tech giants is “great news,” and anytime the stock prices of Amazon, Alphabet and Microsoft go up, “it will balance out some of the weaker and more lackluster numbers recently.
“The market wants to feel good and it’s a cherry on top with these trademark companies beating estimates,” added Delisle
China rate cuts help boost U.S. stock markets
The U.S. markets also benefited from the decision of the People’s Republic of China (PBOC) to cut its one-year lending rate to 4.35% from 4.6% and its one-year deposit rate to 1.5% to 1.75%.
The PBOC also reduced its reserve requirements for all banks by 50 basis points and an extra 50 basis points reduction for certain institutions.
George Magnus, a senior independent economic adviser to UBS Group, commented, “Clearly the People’s Bank of China is on a mission to ease policy and has been for a year. With the economy losing momentum, deflation embedded in the corporate sector and rebalancing making limited headway, the central bank is being directed to ease monetary policy further. Of course, this isn’t the end of the road yet.”
Stock market gainers/losers
Amazon.com (NASDAQ:AMZN) gained more than 6% to $599.03 per share. The e-commerce giant reported earnings of $0.17 per share compared with the $0.13 per share expected by analyst. Its revenue was $25.36 billion, higher than the $24.91 billion consensus estimate.
The Class A shares of Alphabet (NASDAQ:GOOGL) climbed more than 5% to $719.33 per share. The company’s Class C shares (NASDAQ:GOOG) increased more than 7% to $702 per share.
Alphabet reported that Google’s non-GAAP earnings were $7.35 per shares higher than the $7.21 per share consensus estimate. Its $18.7 billion total revenue also beat the $18.53 billion revenue estimated by Wall Street analysts.
The stock price of Microsoft Corporation (NASDAQ:MSFT) surged 10% to $52.87 per share. The software giant reported that its earnings were $0.67 per share versus the $0.59 per share consensus estimate. Its $21.7 billion revenue beat the $21 billion expected by analysts. The company said its Windows 10 adoption was strong, and it is now running in 110 million devices.
Pandora Media (NYSE:P) plummeted more than 35% to $12.35 per share. The company announced a $90 million settlement related to its use of recording before 1972. The company’s quarterly revenue of $311.6 was slightly lower than the $312 million expected by analysts. Its earnings pf $0.10 per share was in line with consensus estimate.
Stratasys tanked more than 10% to $27.67 per share. The company warned investors that its revenue for the third quarter will be around $166 to $168 million lower than the $184.6 million estimated by analysts. Stratasys expected its earnings in the range of -$0.03 to $0.02 per share compared with the $0.08 per share expected by analysts.