Semiconductor Outlook Pushes Index Higher

U.S. equities indexes posted daily gains for the first time this week, as optimism about growth in the semiconductor industry helped push stocks higher.

The S&P 500 advanced 0.9% on Thursday, while outperformance in the tech sector helped the Nasdaq post strong gains of 1.4%. The Dow recovered from losses seen earlier in the day to close the session 0.5% higher.

Shares of Fastenal (FAST) topped the S&P 500, adding 7.2% after the distributor of fasteners and other industrial supplies reported stronger-than-expected financial results. Although many of its end users faced difficult operating environments, the company highlighted sales growth at its onsite locations and with its large customers.

Although shares of Spirit Airlines (SAVE) plummeted after courts blocked a buyout by JetBlue (JBLU), the news may be providing a tailwind to rival carriers. Shares of American Airlines (AAL) gained 6.9% on Thursday, while Southwest Airlines (LUV) shares moved 6.8% higher.

Taiwan Semiconductor Manufacturing Company (TSM), which supplies chips to Apple (AAPL) and other tech giants, issued a stronger-than-expected outlook for 2024, anticipating strong demand for artificial intelligence (AI) applications. TSM’s American depository receipts (ADRs) soared 9.8%, while shares of fellow chip industry players Applied Materials (AMAT), Lam Research (LRCX), and Qualcomm (QCOM) gained more than 4%.

Discover Financial Services (DFS) saw Thursday’s steepest losses among S&P 500 stocks. Shares tumbled 10.8% after the credit card company reported lower-than-expected profits for the fourth quarter, noting that it increased its provision for credit losses to account for potential defaults as its customers face difficult conditions.

Shares of Humana (HUM) plunged 8.0% after the health insurance giant warned that higher medical costs for Medicare Advantage patients would hurt its bottom line. Shares of CVS Health (CVS) dropped 4.0% that same day.

KeyCorp (KEY) shares fell 4.6% after the commercial banking firm reported a year-over-year decline in profits for the fourth quarter. A decline in interest income and a $190 million charge from the Federal Deposit Insurance Corporation (FDIC) following the collapse of other regional lenders dragged down the company’s results.