Following a nosedive seen early in the session, stocks showed a substantial recovery attempt over the course of the trading day on Thursday. The major averages climbed well off their worst levels of the day, with the Dow reaching positive territory.
The Dow ended the day up 55.96 points or 0.1 percent at 49,071.56, while the S&P 500 closed down just 9.02 points or 0.1 percent at 6,969.01.
The tech-heavy Nasdaq ended the day more firmly negative, down 172.33 points or 0.7 percent at 23,685.12, although it had tumbled by as much as 2.6 percent.
The early sell-off on Wall Street came amid a steep drop by shares of Microsoft (MSFT), with the software giant plummeting by 10.0 percent to its lowest closing level in nine months.
Microsoft came under pressure after the company reported slowing cloud computing growth in its fiscal second quarter and provided disappointing third quarter operating margin guidance.
“Cloud computing is closely tied to the AI story and failure to either meet or beat previous growth rates raises the risk in the market’s eye that some AI expenditure might be too high if demand is not also going through the roof,” said Dan Coatsworth, head of markets at AJ Bell.
Profit taking may also have contributed to the early weakness after the S&P 500 briefly peeked above the 7,000 level for the first time during Wednesday’s session.
Selling pressure waned over the course of the trading day, however, leading some traders to buy the dip amid ongoing optimism about the outlook for the economy.
A strong performance by shares of Meta Platforms (META) may also have kept negative sentiment relatively subdued.
Meta spiked by 10.4 percent on the day after the Facebook parent reported better than expected fourth quarter results and forecast first quarter revenues above analyst estimates.
Shares of IBM Corp. (IBM) also surged after the tech giant reported fourth quarter results that exceeded expectations on both the top and bottom lines.
Sector News
Despite the recovery by the broader markets, software stocks continued to see substantial weakness, with the Dow Jones U.S. Software Index plunging by 7.7 percent to a nine-month closing low.
The nosedive by Microsoft weighed on the sector along with a steep drop by ServiceNow (NOW), which plummeted by 9.9 percent despite reporting better than expected fourth quarter earnings.
Considerable weakness also remained visible among gold stocks, as reflected by the 3.8 percent slump by the NYSE Arca Gold Bugs Index. The sector saw continued weakness even though the price of gold recovered from an early sell-off.
On the other hand, airline stocks moved sharply higher over the course of the session, driving the NYSE Arca Airline Index up by 2.3 percent.
Telecom, banking and commercial real estate stocks also moved notably higher as the day progressed, helping to lift the markets well off their early lows.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday. Japan’s Nikkei 225 Index closed marginally higher, while China’s Shanghai Composite Index edged up by 0.2 percent and Hong Kong’s Hang Seng Index climbed by 0.5 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index dove by 2.1 percent, the French CAC 40 Index crept up by 0.1 percent and the U.K.’s FTSE 100 Index inched up by 0.2 percent.
In the bond market, treasuries regained ground following the pullback seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 2.4 basis points to 4.227 percent.
Looking Ahead
Reaction to earnings news from Apple (AAPL) may drive trading on Friday, with the tech giant due to report its fiscal first quarter results after the close of today’s trading.
Trading on Friday may also be impacted by reaction to the Labor Department’s report on producer prices in the month of December.
Business News
U.S. Stocks Stage Significant Recovery Attempt After Early Sell-Off
2026-01-29 21:17:07
