Wall Street extended its rally on Thursday as strong earnings from Facebook added to optimism after the Federal Reserve’s dovish remarks the previous day, while investors waited for the outcome of U.S.-China trade talks.
Stocks rallied to cap their biggest monthly gain in three years as better-than-expected corporate earnings and the Federal Reserve’s dovish turn lifted investor sentiment.
Technology shares led advances as the S&P 500 Index closed at an eight-week high. General Electric Co. and Facebook Inc. both surged more than 10 percent after traders cheered their quarterly results.
Emerging-market shares advanced while Treasury yields fell a day after signals from the Fed that it will be “patient” on interest-rate moves and flexible on reducing its balance sheet.
The S&P 500 posted its best month since October 2015 after Wednesday’s statement from the Fed helped ease fears that the central bank would continue with plans to tighten policy even in the face of cooling economic data.
Outside the earnings realm, investors have an eye on meetings between Chinese negotiators and their counterparts in Washington to resolve the trade dispute. Trump said discussions are going well but that no deal will be final until he meets with Chinese President Xi Jinping “in the near future.”
Meetings between Chinese President Xi Jinping’s top economic aide, Vice Premier Liu He, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin continue on Thursday.
Amazon Down on First-Quarter Forecast
Amazon on Thursday forecast first-quarter sales below Street estimates, as it faces regulatory hurdles in India and a slowdown in e-commerce sales in Europe. As a result, Amazon’s shares fell 1.1 percent to $1,700 in trading after the bell.
Amazon began removing a wide array of products from its India website late on Thursday to comply with the new foreign investment curbs that kick in on Feb.1 and disallow companies from selling products via vendors in which they have an equity interest.
The company forecast net sales of between $56 billion and $60 billion for the first quarter, missing the analyst average estimate of $60.77 billion, according to IBES data from Refinitiv.
Net sales for the fourth quarter rose 19.7 percent to $72.38 billion and exceeded the consensus estimate of $71.87 billion on the back of a strong holiday season.
Amazon’s net income rose to $3.03 billion, or $6.04 per share, in the quarter ended Dec.31 from $1.86 billion, or $3.75 per share, a year earlier, which included a tax gain.