The CNN Money Fear and Greed index showed an increase in the overall market sentiment, but the index remained in the “Greed” zone on Thursday. This indicates that investors are still exhibiting a higher level of greed in the market.
U.S. stocks closed higher on Thursday, with the Dow Jones index gaining more than 350 points during the session. This positive momentum was fueled by the US central bank’s decision to maintain its benchmark fed funds rate range at 5.25%-5.5%. Federal Reserve chairman Jerome Powell also indicated that the central bank is unlikely to cut rates in March, which further boosted investor confidence.
Shares of Merck & Co (MRK) gained 4.6% on Thursday after the company reported better-than-expected fourth-quarter financial results and issued FY24 adjusted EPS guidance above estimates. However, Honeywell International Inc (HON) shares fell 2.5% after the company reported downbeat revenue for its fourth quarter and issued a weak outlook.
After the closing bell, Amazon.com, Inc. (AMZN) shares gained around 7% in after-hours trading following stronger-than-expected fourth-quarter results. Apple, Inc. (AAPL) also reported upbeat earnings and revenue for its first quarter.
On the economic data front, U.S. initial jobless claims increased to 224,000 in the week ending January 27, compared to a revised 215,000 in the prior week. The ISM manufacturing PMI rose to 49.1 in January, the highest level since October 2022, signaling an improvement in the manufacturing sector.
Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, consumer staples, and utilities stocks recording the biggest gains on Thursday. However, energy stocks bucked the overall market trend, closing the session slightly lower.
The Dow Jones closed higher by around 370 points to 38,519.84 on Thursday. The S&P 500 rose 1.25% at 4,906.19, while the Nasdaq Composite jumped 1.30% at 15,361.64 during Wednesday’s session.
Investors are now eagerly awaiting earnings results from Bristol-Myers Squibb Company (BMY), Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), and W.W. Grainger, Inc. (GWW) today.
At a current reading of 70, the Fear and Greed Index remained in the “Greed” zone on Thursday, indicating that investors are still exhibiting a higher level of greediness in the market.
The Fear and Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators and ranges from 0 to 100, with 0 representing maximum fear and 100 signaling maximum greediness.
Overall, the market sentiment remains positive, with investors exhibiting a higher level of greed. However, it is important for investors to remain cautious and analyze the fundamentals of individual stocks before making investment decisions.
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