por admin » Vie Jul 31, 2020 2:53 pm
Stocks erase losses as Apple shares soar 10% to new high on the day
PUBLISHED THU, JUL 30 20205:15 PM EDTUPDATED 2 MIN AGO
Yun Li
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Fred Imbert
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Stocks set to open in the green following blowout earnings from Big Tech
Stocks wiped out earlier losses on Friday as the biggest tech companies and market leaders — Amazon, Apple and Facebook — soared after posting stellar quarterly results.
The Dow Jones Industrial Average rose about 30 points after dropping 286 points at its low of the day. The S&P 500 last traded up 0.4%, while the Nasdaq Composite gained 0.8%, led by a 10% jump in Apple shares.
A few negative headlines weighed on the broader market despite the blowout numbers from major tech companies:
Emergency unemployment benefits are set to expire Friday and Congress and the White House still seem far apart on an agreement. White House Chief of staff Mark Meadows said Democratic leaders have rejected four offers regarding the coronavirus relief bill.
Dow-component Chevron fell more than 4% after the oil giant reported an $8.3 billion loss in the second quarter as the pandemic “significantly reduced demand.”
Consumer sentiment deteriorated this month amid a resurgence in new coronavirus cases. University of Michigan’s consumer sentiment index came in at 72.5 for July, down from June’s 78.1 and below Dow Jones estimates of 72.7.
Stocks linked to an economic recovery like banks and retailers were lower as investors assessed the biggest quarterly gross domestic product contraction on record and persistently weak job growth. JPMorgan and Home Depot were both in the red.
There could be a so-called sell-the-news effect now that technology companies have delivered strong results to back up their market-leading run.
“You have frothiness and you can’t rally on big cap tech blowing out the numbers. It’s potentially gut check time,” said Peter Boockvar, chief investment officer of Bleakley Global Advisors. “It’s the last day of the month. Who knows what kind of noise is related to that. I also have to believe part of it is the stimulus.”
Apple reported a blowout quarter, sending shares up 10% to a new all-time high. The company said its overall sales expanded by 11%, and Apple also announced a 4-for-1 stock split.
Amazon, meanwhile, traded 5% higher as the company saw its sales skyrocket during the coronavirus pandemic. Facebook shares rallied more than 7% as the social media giant posted revenue growth of 11% even amid the coronavirus pandemic slowdown. The company also issued stronger-than-expected sales guidance for the current quarter.
Google-parent Alphabet also posted better-than-expected earnings, but the company’s overall revenue declined for the first time in its history. Revenue for Google Cloud were also just below analyst expectations. Alphabet shares fell more than 4%.
“Obviously, no one was doubting any of those companies so the fact they all exceeded expectations isn’t exactly shocking,” Adam Crisafulli of Vital Knowledge, said in a note Friday. “Investors are now trying to smooth out some of the numbers (i.e. how much of the monster upside was a function of extremely conservative guidance along w/an unsustainable spike in revenue and decline in expenses?)”
Big Tech has been the stalwart on Wall Street this year. Amazon and Apple are up 65% and 31%, respectively, in 2020. Facebook and Alphabet have risen more than 14% over that time period.
Investors continued to flock to safe-haven assets amid the uncertainty about the economic recovery. Gold futures spiked to an all-time high of $2,005.4 an ounce on Friday, crossing the $2,000 mark for the first time.
Still, the major U.S. equity averages are looking to wrap up the month of July with solid gains. The S&P 500 has gained 4.7% this month through Thursday’s close, on track for its fourth consecutive positive month. The Dow and the Nasdaq Composite have gained 1.9% and 5.2%, respectively, month to date.
— CNBC’s Patti Domm contributed to this report.
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