Dow Ends Flat as Tech Gains Fade Into Close By Investing.com

By Yasin Ebrahim

Investing.com – The Dow gave up some gains late Wednesday, as tech pulled back into the close, but hopes for further stimulus kept the downside momentum in check.    

The Dow Jones Industrial Average rose 0.12%, or 36 points. The S&P 500 was up 0.11%, while the Nasdaq Composite fell 0.02%. 

Technology lost steam into the close Wednesday even as big tech delivered better-than-expected earnings.

Alphabet (NASDAQ:GOOGL), rose 7% 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) fell 2% despite topping Wall Street estimates amid news that Chief Executive Jeff Bezos was set to step down and take up the role of chairman. 

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 7% after reporting a wider-than-expected loss in the fourth quarter. It warned of uncertainty ahead over the pandemic-fueled boost to subscriber growth.

Sentiment on stocks got a lift intraday on signs that U.S. President Joe Biden could be willing to trim the size of the stimulus package to coax support from Republic Senators needed to pass the bill. 

Biden is reportedly willing to send the next round of proposed stimulus checks to a smaller group of Americans and indicated he was open to compromising on several proposals included in his $1.9 trillion Covid-19 relief package, The Wall Street Journal reported, citing unknown sources. 

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 48% after accepting a $7.2 billion takeover offer from Jaz Pharma.