Apple pushes Dow, S&P 500, Nasdaq more than 2% higher

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Wall Street’s major indices had gained more than 2% each in Friday late afternoon trade, boosted by a surge in Apple shares. Investors also parsed key economic data on a core gauge of U.S. inflation that strengthened the case for the Federal Reserve’s aggressive path, ahead of the central bank’s policy meeting next week.

The tech-heavy Nasdaq Composite (COMP.IND) was up 2.46% at 11,057.65 points. The benchmark S&P 500 (SP500) had added 2.18% to 3,890.12 points and the blue-chip Dow (DOW) had climbed 2.37% to 32,793.43 points.

All three indices benefited from a ~8% surge in Apple after the iPhone maker topped quarterly estimates. Microsoft and Google parent Alphabet also rallied more than 3% each after heavy losses over the last few days.

The S&P is on track to post weekly gains of +3%. The Dow is already up more than 5% for the week, as strong quarterly reports from its components have buoyed the index.

The Nasdaq is looking on course to add nearly 2% for the week, despite a slump in megacap technology stocks.

Putting the outsize impact of those few major stocks in perspective, the S&P 500 Equal-Weighted Index (RSP) is up 4.5% for the week, more than double the rise in SPY.

All 11 S&P 500 sectors were trading in the green, with the exception of Consumer Discretionary stocks which were weighed down by a 8% slide in Amazon after the e-commerce giant issued a gloomy holiday sales forecast.

With Apple and Amazon’s quarterly reports, FAANG earnings come to an end. The group saw a mixed bag of results, with Netflix and Apple the only bright spots. Along with Amazon, Facebook parent Meta and Google owner Alphabet also disappointed.

In other earnings news, Intel provided another boost to the Dow, with shares advancing ~10% as investors cheered the chip giant’s quarterly beat and plans to cut jobs. Oil majors ExxonMobil and Chevron gained after posting some of their highest ever quarterly profits.

Bonds snapped a three-day rally. The 10-year Treasury yield (US10Y) was up 7 basis points to 4.01%. The 2-year yield (US2Y) was up 8 basis points to 4.40%. The dollar (DXY) was +0.2%.

Investors also gauged data that showed a rise in the core personal consumption expenditures price index, a key gauge of inflation. Personal income and outlays came in at a higher-than-expected +0.4%.

The Fed’s policy meeting starts next Wednesday, at the end of which it is widely expected to hike interest rates by 75 basis points. Investors will be closely watching for any comments from the policymakers that might indicate the central bank was thinking about moderating its aggressive rate-hike stance.

“The main development should be the forward guidance in the FOMC statement and in Chair Powell’s prepared remarks at the press conference,” JPMorgan’s Michael Feroli said in a preview note.

“Since March, the post-meeting statement has indicated that the Committee ‘anticipates that ongoing increases in the target range will be appropriate.’ We think this will be unchanged, but see a risk of it being softened to something like ‘…some further increases…’,” Feroli added.

In other economic news, September pending home sales sank 10.2% M/M to 79.5 compared to the forecasted -3.8%. Employment cost index for Q3 came in at +1.2% Q/Q, matching consensus.

Among active stocks, Pinterest surged following steady user numbers. DaVita was the top S&P 500 loser after the dialysis services provider lowered its guidance.

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