STORY: The Dow registered its fourth record high in five days on Thursday, after stronger-than-expected monthly retail sales and a chip stock rally powered by Taiwan Semiconductor’s upbeat forecast.
The Dow added more than a third of a percent, while the S&P 500 and Nasdaq ended essentially flat.
Shares of Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker, gained nearly 10% after the company beat Wall Street estimates for profit, and forecast a jump in fourth-quarter revenue, driven by demand for artificial intelligence chips.
That helped propel other chip stocks, including AI-trade favorite and TSMC customer Nvidia.
The chip rally came just days after a downbeat forecast from chip equipment maker ASML sparked a global stock selloff.
Mike Mussio is president of FBB Capital Partners.
“I think we’re in a cycle of high-quality businesses that are priced for, kind of, perfection. To be in a position where based on the current earnings report for the prior quarter and then importantly guidance going forward is going to make a difference. And we’ve seen you have two great examples in the same sector of one that was down 10-plus percent and one that was up 10 percent on that earnings number. So there’s some idiosyncratic things going on with each of those companies, kind of very different though in the same industries. I think this is a good reminder for investors to be monitoring not only what they’re invested in, but what their position sizing is on the other side of these moves, and whether or not they should be rebalancing.”
In other movers, shares of Netflix, down 2% at the close, rose more than 3% in after-hours trading after the streaming service said it picked up 5.1 million subscribers in the third quarter, topping Wall Street estimates by more than 1 million users.
And shares of Travelers Companies and Blackstone Group both advanced after the insurer and the money manager posted third-quarter profit which beat market expectations.
