By Yasin Ebrahim
Investing.com -- The Dow closed flat Thursday, as investors piled in on tech stocks following a rally in Meta, though weakness in health care and energy weighed on upside momentum.
Meta Platforms Inc (NASDAQ: META ) reported fourth-quarter revenue that topped estimates and announced a $40 billion share buyback program, sending its shares more than 23% higher. Sentiment on the stock was further boosted after chief executive Mark Zuckerberg detailed plans including flattening the organization’s structure to make the firm more efficient.
The focus on efficiency was welcomed by Wall Street after the firm spent billions in investments to support engagement following the hit from Apple’s privacy-related changes to its mobile operating system, iOS.
“The transitions had been painful for investors, and while it's too early to declare victory, early evidence from Zuckerberg's pivot appears to be bearing fruit,” Deutsche Bank said as it hiked its price target on the stock to $200 from $125 a share.
As well as earnings from Meta, sentiment on tech was also helped by renewed confidence that the Federal Reserve will end rate hikes sooner rather than later after downshifting to a quarter-point rate hike on Wednesday.
“The rates market is now implying a peak funds rate of 4.88%, which means just one more hike, likely followed by a May pause,” Jefferies said in a note.
Tesla (NASDAQ: TSLA ) added to its recent rally, rising more than 3% as clouds hanging over demand in China appear to be departing somewhat following a Reuters report that the company will lift output at its Shanghai factory to nearly 20,000 vehicles per week for February and March.
The surge in growth corners of the market including tech and consumer discretionary appeared to come at the expense of value sectors as energy and healthcare stocks fell.
Healthcare, meanwhile, was also pressured by a slump in Eli Lilly and Company (NYSE: LLY ) after the drug maker missed fourth-quarter revenue estimates amid weaker sales in its lung cancer drug Alimta and the impact of a stronger dollar.
In other news, Coinbase (NASDAQ: COIN ) jumped 24% after a class-action suit alleging the crypto exchange sold unregistered securities on its platform was dismissed.
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