Stocks rose after the Federal Reserve’s latest interest rate announcement, with the Nasdaq ending Wednesday’s session 2% higher. Investors focused on comments from Fed Chairman Jerome Powell that suggested the central bank was starting to make money progress in the fight against inflation.
Chinese tech stocks took part in the rally, boosted by news that Blackrock ( BLK ) took an increased stake in Baidu ( BIDU ). Alibaba ( BABA ), JD.com ( JD ), and Pinduoduo ( PDD ) also got a boost.
On the other hand, Peloton Interactive (PTON) increased its value by more than a quarter after the release of quarterly results. The earnings news also boosted Old Dominion Freight Line ( ODFL ), which hit a new 52-week high.
Recording (NYSE: SNAP) moved in the other direction, falling after the quarterly update.
Sector in focus
Baidu ( BIDU ) attracted an increased stake from asset manager Blackrock ( BLK ), sparking gains among China-based tech names. Investors are betting that the sector will continue to attract capital now that the government in Beijing has abandoned its zero-epidemic policy of COVID.
The regulatory filing showed that BLK increased its passive stake in the Chinese tech giant to 6.6%, up from a previous value of 3.5%. BIDU jumped 13% on the news.
This sparked gains across the sector. Alibaba ( BABA ) and JD.com ( JD ) each rose about 2%. Pinduoduo (PDD) climbed around 5%.
Better-than-expected revenue and a smaller loss fueled a wave of buying in Peloton Interactive (PTON). Shares of the former pandemic darling, which have fallen from their post-Covid highs, jumped nearly 27% on the day.
The home exercise equipment maker reported an adjusted EBITDA loss of $122 million, compared with $267 million in the same period last year. While its product revenue fell 52% from last year, subscription revenue rose 22% and now makes up the majority of total revenue.
PTON ended trading at $16.36, up $3.43 on the day. This extended the gains seen over the past month. Inventories have more than doubled since the end of 2022.
With Wednesday’s advance, PTON hit its highest close since last May. However, shares remained down about 39% for the past year.
The disappointing forecast sent Snap ( SNAP ) sharply lower, with shares of the social media network down more than 10%.
The company reported flat revenue for the fourth quarter, largely in line with analysts’ expectations. However, the company said first-quarter sales were likely to fall 2% to 10%.
“We continue to face significant obstacles as we seek to accelerate revenue growth and make progress in improving return on investment for advertisers and innovating to deepen engagement with our community,” said the company’s CEO.
SNAP fell $1.19 to $10.37. That canceled out some of the gains the stock posted in its earnings report. The stock remains about 17% higher for 2023 so far.
Significant New High
Old Dominion Freight Line ( ODFL ) rose more than 10% after posting better-than-expected quarterly results. With the advance, shares of the trucking company hit a 52-week high.
ODFL reported Q4 EPS of $2.92, topping expectations by $0.25. The bottom line was strengthened by operational improvements and sharp reductions in purchased transportation costs.
Following the earnings report, ODFL rose to an intraday 52-week high of $374.13. Shares have since declined, eventually closing at $367.62. This represented an advance of $34.38 per day.
Wednesday’s advance added to a recent rally, with the stock up 30% so far in 2023.
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