The S&P 500 hit a new intraday record on Thursday after earnings were blown out by two of the world's largest tech companies: Apple and Facebook.
Stocks trimmed their opening gains about an hour into the session as traders took profits, wondering if much of the positive earnings news had already been priced into the markets.
The Dow Jones Industrial Average, which opened more than 200 points higher, was last traded around the flatline. The S&P 500 was up 0.2% after hitting a new all-time high at the start of trading in New York.
The tech-heavy Nasdaq Composite, up 1% earlier in the day, was last seen just below the flatline as traders took profits after a plethora of strong tech gains. Amazon and Alphabet gained 0.5% and 1.5%, respectively.
Investors pointed to strong earnings results from both iPhone maker Apple and social media platform Facebook to explain the S&P 500's intraday record at the opening.
Sales rose 54% for the quarter, with each product category posting double-digit growth, according to Apple. The company also announced it would increase its dividend by 7% and approved share buybacks of $ 90 billion. Apple shares rose 0.4%.
Facebook revenue grew 48% due to higher-priced ads. The inventory increased by up to 6.5% and reached a record high. Qualcomm shares rose 4% after seeing sales jump 52%.
Cruise stocks rose after the CDC announced that crossings from US ports could begin in mid-July. Carnival and Norwegian stocks rose 0.6% and 2.3%, respectively.
"The primary market trend remains positive," said Keith Lerner, chief marketing strategist at Truist. "We expect a more troubled environment, however, as tensions between better economic growth and better earnings prospects versus the potential for higher taxes and rising interest rates as the economy normalizes," he added.
Thursday marks the 100th day of President Joe Biden's tenure. On Wednesday evening, he gave his first address to a joint congressional session where he unveiled his previously popular agenda, which included a $ 2 trillion infrastructure plan and a freshly unveiled $ 1.8 trillion family plan Includes children and students.
Thursday is also the busiest day of the quarterly earnings season. Around 11% of the S&P 500 is to be updated quarterly.
McDonald & # 39; s released its results before the opening bell, telling investors that its sales have finally topped pre-pandemic levels. The Dow component also increased the prospects for system-wide revenue growth.
Caterpillar, which also reported Thursday, lost 2.6% while Merck fell 5.1% after disappointing results. Amazon, Gilead Sciences, Twitter, US Steel and Western Digital will post results after the market closes.
The economic data released on Thursday gave investors a glimpse of the progress of the economic recovery.
First-quarter GDP hit an annualized rate of 6.4%, according to a report released by the Bureau of Economic Analysis, a sign that the U.S. economy started accelerating in 2021. Aside from the spike in reopenings in the third quarter of last year, that was the best period for GDP since the third quarter of 2003.
The Department of Labor, meanwhile, reported that initial jobless claims totaled 553,000 last week, just above the Dow Jones estimate of 528,000.
The Federal Reserve said Wednesday that it would keep interest rates near zero. The S&P slid from its high after Federal Reserve Chairman Jerome Powell said during a press conference following the Federal Open Market Committee's decision that there was some signs of froth in the market.
"Interest rates are unchanged for now and despite the improvement in economic data, the cone talk was off the table at today's Federal Reserve meeting," said Bethany Payne, portfolio manager at Janus Henderson.
"As vaccination rates accelerate, employment boosts and expansive fiscal policies continue to support household and corporate incomes, investors are now looking for signs of whether the central bank's safety net may be pulled out sooner than expected," she added.
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