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Investing.com – The Dow struggled for direction on Wednesday, but losses were kept in check by upbeat labor and services data pointing to underlying strength in the recovery and bullish quarterly results from big tech.
The Dow Jones Industrial Average rose 0.04%, or 12 points. The S&P 500 was up 0.35%, while the Nasdaq Composite added 0.41%.
Big tech continued to deliver better-than-expected earnings as both Google-parent Alphabet and Amazon markedly beat analysts’ projections.
Alphabet (NASDAQ:GOOGL), rose 8% to record highs as strong ad-revenue growth in its YouTube and Search businesses bolstered performance.
“Q4 results far surpassed expectations on the back of heightened user engagement across Search and YouTube, a continued rebound in advertiser spending, and ongoing strength within Google Cloud,” Wedbush said in a note.
Amazon.com (NASDAQ:AMZN), also topped Wall Street estimates, but news that Chief Executive Jeff Bezos was set to step down and take up the role of chairman overshadowed the results. Its shares were roughly unchanged on the day.
Andy Jassy, CEO of Amazon Web Services, will take the reins in Q3. This change in leadership “confirms that AMZN does not plan to spin off AWS, unless forced to by regulatory factors,” Oppenheimer said.
Spotify Technology (NYSE:SPOT), meanwhile, slumped 8% after reporting a wider-than-expected loss in the fourth quarter. It warned of uncertainty ahead over the pandemic-fueled boost to subscriber growth.
eBay (NASDAQ:EBAY) and PayPal Holdings Inc (NASDAQ:PYPL) are among the notable companies set to report earnings after the closing bell.
The economic recovery, meanwhile, continued to strengthen as the labor market and services activity topped economists’ estimates.
The ADP reported that private-sector employment rose by 174,000 last month, surpassing the 70,000 job gains expected.
The move comes just days ahead of the crucial monthly nonfarm payrolls report due Friday, with economists forecasting the economy created 70,000 jobs last month.
The ISM Services Index increased to 58.7 in January from 57.7 in the prior month, the highest reading since February 2019.
The retail-led short-squeeze trade in AMC Entertainment Holdings (NYSE:AMC) and GameStop (NYSE:GME) resumed on signs the short sellers were increasing their bearish bets. Both stocks were up intraday following a two-day drubbing.
In other news, GW Pharmaceuticals (OTC:GWPRF) PLC ADR (NASDAQ:GWPH) jumped more than 50% after accepting a $7.2 billion takeover offer from Jaz Pharma.
