Stocks jump as Apple’s boom outweighs Amazon’s lack

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U.S. stocks rallied on Friday as a beating in Apple earnings helped stocks bounce back after a week of Wall Street misfires for Big Tech.

The S&P 500 (^GSPC) gained 2.5%, while the Dow Jones Industrial Average (^ DJI) rebounded more than 800 points, or 2.6% to a two-month high, also posting a fourth consecutive week of gains. The Nasdaq Composite (^IXI) increased by 2.9%. The moves came even as Treasury yields climbed back above 4%.

On the economic data front, the Federal Reserve’s favorite inflation measure showed that prices are still hot throughout the US economy.

The basic personal consumption expenditure (PCE) price index rose 0.5% in September from the previous month, the Commerce Department said Friday — a slight slowdown from the 0.6% month-over-month pace in August. The gauge showed a 5.1% year-over-year increase, an acceleration from the annual 4.9% seen in August. Economists polled by Bloomberg had expected increases of 0.5% and 5.2%, respectively.

Personal income rose 0.4% in the month and consumer spending 0.6%, compared to economists’ estimates of a 0.4% increase for each measure.

Amazon (AMZN) shares fell about 7% on Friday after the e-commerce giant published fourth quarter sales forecast that missed Wall Street estimated and delivered disappointing Q3 results. The error marks the second straight quarter where weak finances at the company have caused its share price to drop by double digits.

Meanwhile, Apple (AAPL) offered a “weak light in an otherwise bleak earnings season”, fared better than its Big Tech peers as they grappled with macro headwinds posed by inflation, rising interest rates and currency headwinds. The company reported record revenue but missed analysts’ projections in key categories such as iPhone and Services. Shares rose around 8%, marking the tech giant’s best day since July 2020.

Elsewhere in the tech spotlight, Elon Musk has taken ownership of Twitter (TWTR) after a drag bid to buy social media platform was finalized on Thursday evening. Tesla’s CEO fired top executives at the end of his $44 billion acquisition of the company and announced plans to reverse lifetime bans from the website.

The Twitter logo and a photo of Elon Musk are shown through a magnifying glass in this illustration taken October 27, 2022. REUTERS/Dado Ruvic/Illustration

A busy start to Friday for investors was also marked by other reports from energy conglomerates Exxon Mobil (XOM) and chevron (CLC), both of which reported earnings and revenue that beat Wall Street estimates — boosting each name’s shares by about 2.9% and 1.1%, respectively.

SoFi’s head of investment strategy, Liz Young, said in a note that she expects further downgrades and other notable misfires this quarter and next, which are likely to challenge the market more. Young noted, however, that on the positive side, it means investors can tick the box “earnings are affected.”

“As we go through this process, we’ll probably see the economy skidding in a bit more dramatic way than what we’ve seen so far,” Young said. “There are already several classic recession warning signs, and the risks that lie ahead bring the likelihood of a true recession closer.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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