- Apple rises on upbeat Q4, Amazon slumps after grim forecast
- U.S. consumer spending beats expectations in September
- Indexes up: Dow 1.36%, S&P 0.83%, Nasdaq 0.62%
Oct 28 (Reuters) – Wall Street’s main indexes rose on Friday as a jump in shares of Apple on upbeat results provided enough of a boost to outweigh a dour warning from Amazon.com.
Amazon.com Inc (AMZN.O) joined other Big Tech firms that have disappointed investors this week by predicting a slowdown in sales growth for the holiday season amid a hit to purchasing power of consumers. Shares tumbled 10.7%.
The online retailer is now on the brink of losing its spot in the trillion-dollar company club.
Shares of other megacap tech companies such as Microsoft (MSFT.O), Meta Platforms Inc (META.O) and Google-parent Alphabet (GOOGL.O), which reported downbeat earnings earlier this week, were trading higher.
Big Tech earnings are viewed as a major test of the strength of corporate America in the face of decades-high inflation, with only Apple’s report being perceived as the only positive outlier.
“Apple has not cracked like the other tech firms and shows how it can be done,” said Ben Barringer, equity research analyst at Quilter Cheviot.
“While we should expect a slowdown in the next earnings report, the company continues to hold up well, unlike its big tech rivals.”
Bank of America Global Research said investors took advantage of a recent wipeout in U.S. tech stocks this week to snap up shares despite their vulnerability to higher interest rates.
Data showed underlying inflation pressures continued to bubble, even as U.S. consumer spending increased more than expected in September.
The Commerce Department’s core Personal Consumption Expenditures Index, the Fed’s preferred inflation measure, climbed 5.1% in September compared to an expected 5.2% rise year-on-year when stripped of volatile food and energy costs.
The Federal Reserve is still expected to deliver another jumbo-sized 75 basis-point increase in November. For December, traders are largely expecting a 50 basis-point increase. FEDWATCH
At 10:20 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 435.65 points, or 1.36%, at 32,468.93, the S&P 500 (.SPX) was up 31.57 points, or 0.83%, at 3,838.87, and the Nasdaq Composite (.IXIC) was up 67.05 points, or 0.62%, at 10,859.73.
Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and eight new lows, while the Nasdaq recorded 44 new highs and 59 new lows.
Reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru; Additional reporting by Sruthi Shankar; Editing by Sriraj Kalluvila
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