Amazon, Netflix Gains Help Lead a Strong Day for the Market
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Stock prices soared after encouraging words from Federal Reserve Chairman Jerome Powell today.
In comments at a luncheon in New York, the Fed Chairman said that the central bank's benchmark Fed Funds rate -- currently at a range of 2.0 percent to 2.25 percent -- was now "just below neutral." Neutral is considered an interest rate level that neither stimulates nor restricts economic growth and is presumably a target rate for the Fed at this point.
That's a major shift from his comments at the beginning of October, when he said that rates were still "a long way from neutral." Investors are hoping it means the Fed will either not raise rates as expected next month and/or reduce the number of rate hikes it planned to make next year.
Stock prices spiked shortly after Powell began his speech at noon, with strength across all segments of the market. The Entrepreneur Index™ closed the day up 3.17 percent, with only four of 60 stocks in the red. The Dow Jones Industrials index surged 617 points (2.5 percent), while the S&P 500 and Nasdaq composite indexes were up 2.3 percent and 2.95 percent respectively.
The technology sector had some of the largest gains of the day, with salesforce.com up 10.24 percent--the biggest jump on the Entrepreneur Index™. Adobe Systems Inc. also rose 7.3 percent. Amazon was up 6.09 percent and Netflix closed the day 6.01 percent higher. Facebook was the weakest of the so-called FANG stocks, rising 1.3 percent.
Under Armour Inc. was up 5.55 percent -- the biggest gain on the index outside the tech sector. The athletic apparel maker reported blow-out earnings at the end of last month and has been on a tear of late. The stock is up 62 percent so far this year. After big gains in the last two days, L Brands was up a more modest 1.78 percent today. Gap Inc. was up 2.53 percent.
Other prominent gains on the index today included NVIDIA Corp. (4.12 percent), Alphabet Inc. (4.0 percent), Boston Scientific Corp. (3.94 percent), Chipotle Mexican Grill (3.61 percent) and Verisign Inc. (3.35 percent).
While most of the market was up smartly, J.M. Smucker Company was clobbered after it reported disappointing financial results this morning. The stock was down 7.24 percent, the biggest decline by far on the Entrepreneur Index™ today. The food-maker missed badly on earnings estimates, was shy of revenue targets, and lowered guidance for its full-year outlook. Fellow food-maker Tyson Foods (-2.31 percent) was also down sharply.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.