Nasdaq jumps 2.27%, closes above 5000

As a point of reference, NASDAQ closed the week at 5,031.86 (+2.27 percent), the Dow Jones Industrial Average ticked up to 17,646.70 (+0.9 percent), and the S&P 500 rose to 2,075.15 (+1.1 percent). S&P 500 futures gained 2 points, or 0.11% to 2055, while Nasdaq 100 futures added 17 points, or 0.36% to 4569. The tech-heavy Nasdaq Composite outperformed other indexes, advancing 92 points, or 1.9%, to 5,013, lifted by the tech run-up.

“We believe that initially, Amazon built out this business for its own purposes (including the delivery of streaming video for Prime members), as it was able to partially subsidize its capital and operating expenditures by charging its customers for the use of its services”, analyst Michael Pachter of Wedbush Securities says. “There’ve been a lot of worries out there, and yet there are a few very strong tail winds the market can’t ignore, and we’re seeing that this morning with tech earnings“.

Tech shares led the stock market’s recovery in the USA this past week form one of its worst corrections in the past four years during August, thanks to gains by Amazon, Alphabet and Microsoft, after those three companies reported earnings results that were better than had been expected. Microsoft jumped $5.15, or 10.7 per cent, to $53.18, while Amazon gained $39.94, or 7.1 per cent, to $603.85.

Microsoft jumped 10 percent, Alphabet surged 9.7 percent and Amazon climbed 9.6 percent at 8:25 a.m.in New York after each reported sales and profits that exceeded analyst estimates.

Before the start of the third-quarter reporting season, corporate earnings had been expected to fall by 4.1 percent, according to Thomson Reuters data. Sales rose 13% last quarter, profit soared 45%, and the company even seemed to have found a solution to its mobile woes. The stock lost $6.80 to $12.39.

FALLING SHORT: Skechers United States of America slumped 35 percent after the shoe company reported better-than-expected third-quarter profit, but a jump in revenue still disappointed Wall Street. The stock slid $16.05 to $30.14. Amazon’s disdain for posting net income means the stock has had a P/E over 100 for a few time; the more-steady Alphabet, which is transitioning into a return-of-cash story, has a forward P/E of a mere 22 despite this year’s gains.

LONDON – European stock markets rallied on expectations of further economic stimulus for the eurozone and China’s decision to slash interest rates to counter the slowdown in the world’s second-biggest economy. Germany’s DAX gained 3.3 percent, while France’s CAC 40 rose 2.7 percent. Japan’s Nikkei 225 fell 0.6 percent and South Korea’s Kospi dropped 1 percent.

After jumping as much as 1.8 percent Thursday, the benchmark gauge for American equities now sits at a level last seen on August 19 and is 7 points below its December. 31, 2014 closing price, making its performance year-to-date just about flat.

USA government bond prices rose. The yield on the 10-year Treasury note rose to 2.08 per cent from 2.03 per cent the day before.

The dollar was also steady against the yen at 120.61 yen, after touching a one-month high of 120.99 yen earlier, and set for a gain of 1 percent for the week.

“When (ECB executive board member Benoit) Coeure said in May that the European Central Bank could expand its QE, the euro fell below $1.10”.

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Microsoft surged $4.84, or 10.1 percent, to $52.87.