© Reuters.
By Yasin Ebrahim
Investing.com -- The Dow climbed Thursday, shrugging off an unexpected dip in economic growth as a stronger quarterly results by retailers and a rally in tech put stocks on course to snap their longest weekly losing streak since 1932.
The Dow Jones Industrial Average gained 1.6%, or 516 points, and the Nasdaq was up 2.7% and the S&P 500 rose 2%.
Retailers – victim to a wave of selling pressure recently – were back in vogue as strong results from Macy’s and Dollar Tree eased worries about the strength of the consumer.
Macy’s (NYSE:M) raised its outlook on profit after reporting a better-than-expected first-quarter, supported by price hikes amid strong demand. Its shares ended more than 18% higher.
Dollar Tree (NASDAQ:DLTR) surged more than 21% after reporting quarterly results that beat on both the top and bottom lines as the discount retailer’s recent move to raise prices to $1.25 boosted margin and growth.
Reopening stocks including Norwegian Cruise Line (NYSE:NCLH) and Caesars Entertainment (NASDAQ:CZR) also played a role in pushing the broader market higher as investors bet on a strong travel demand for the summer months ahead.
Tech, meanwhile, racked up gains, with big tech in ascendency as expectations for a Fed pause on rate hikes later this year was boosted by data showing an unexpected decline in first-quarter economic growth.
"We were definitely overdue for a technical rebound and needed any kind of an excuse to rebound, Eric Diton, President and Managing Director at The Wealth Alliance, said in an interview with Investing.com on Thursday. "We got was yesterday from the Fed minutes, where they were less hawkish than they've been recently."
The Fed's minutes from its May meeting, released on Wednesday, showed the central bank was in favor of quickly hiking rates to allow flexibility to readjust policy later this year.
Facebook (NASDAQ:FB) led the gains up more than 4% followed by Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT).
Chip stocks were also supporting the bid in tech, driven by a rally in Nvidia and Broadcom.
NVIDIA (NASDAQ:NVDA) reported better-than-expected first quarter results but guidance fell short of analysts’ estimates.
Some analysts, however, aren’t convinced that it’s time to dip into the chipmaker amid concerns about valuation.
“NVDA is arguably attractively valued at current levels. But, until there is more evidence that indeed this quarter marks a trough for gaming revenues, we believe investors will continue to struggle with NVDA's valuation,” Wedbush said.
Broadcom (NASDAQ:AVGO) was up more than 3% after announcing that it would acquire VMware (NYSE:VMW) in a $61 billion deal.
Twitter (NYSE:TWTR), meanwhile, climbed more than 6% on fresh hopes that Tesla chief executive Elon Musk will proceed with his deal to take the social media company private after the Tesla (NASDAQ:TSLA) CEO increased his commitment in the deal to $33.35 billion.
The move higher in growth comes as valuations have fallen to somewhat lower levels that appear to be coaxing investors back into tech stocks that are showing earnings growth.
"Growth has been trounced ... but you can be selective and start allocating money to growth," Diton said, though stressed that value sectors of the market with lower valuations remain a priority.
"I still want to overweight value. Because value is short duration and rates are still going to be going higher. In a rising rate environment, you want your fixed income and equities allocation to be short duration. "
