The Dow Jones Industrial Average and the S&P 500 indexes chalked up positive numbers for a third day in a row on Thursday, the longest streak in about a month, as investors’ worries of an escalating trade conflict between the United States and China eased and the focus turned to the upcoming earnings season.
The Cboe Volatility Index ended the trading day down 1.12 points at 18.94, its lowest close in more than two weeks.
Boeing, among the hardest-hit stocks on Wednesday after China retaliated with $50 billion in tariffs on U.S. goods, rose 2.7 percent, giving the Dow its largest boost, followed by Goldman Sachs, up 1.3 percent.
Optimism over first-quarter earnings increased, with JPMorgan Chase and other financials expected to kick off the reporting period next week.
Earnings forecasts have increased sharply since Congress approved sweeping changes to the tax law late last year, with first-quarter earnings growth expected to be the highest in seven years.
Facebook, Amazon, Alphabet and Netflix – collectively known as the “FANG” group – were up between 0.3 percent and about 3 percent.
Facebook Chief Executive Mark Zuckerberg said the company had not seen “any meaningful impact” on usage or ad sales since the data privacy scandal.
Amazon rose 2.9 percent after being repeatedly hammered this week by Trump’s attacks on the online retailer.
The Rebound Has Helped Somewhat
With the possibility of a trade war with China fading a bit, the S&P 500 gained 2.9 percent over the past three sessions. However, the S&P 500’s recent volatility has left the index trading down 7 percent from its record high on January 26.
Yet, nearly 18 percent of S&P 500 components have fallen 20 percent or more from their own one-year highs, according to Thomson Reuters data, putting them in bear-market territory. Another 41 percent of S&P 500 stocks are down between 10 and 20 percent from their year highs, a range that investor consider correction territory.
Within the Dow Jones Industrial Average, General Electric has fallen 56 percent from its year high in April 2017, while Walmart is down 20 percent from its year high in January. Another 12 of the Dow’s 30 components have declined between 10 and 20 percent from their year highs.
The two largest companies by stock market value weathered Wall Street’s recent volatility better than most, helping limit the S&P 500’s loss in 2018 to under 1 percent. Apple and Microsoft are down 2.6 percent and 1.5 percent, respectively since the end of February, better than the S&P 500’s 6 percent loss in that time. The two technology behemoths are down about 5 percent each from their own previous record highs.
Amazon is down 5 percent in the past month but remains up 24 percent year to date, as Wall Street continues to believe in the online retailer and that Amazon will expand further into food retail and other markets.