Stocks Set to Open In the Green Following Blowout Earnings From Big Tech
By Yun Li & Fred Imbert (CNBC)
The Dow Jones Industrial Average fell about 150 points as Caterpillar and Chevron led the declines. The S&P 500 dipped 0.3%. The tech-heavy Nasdaq Composite bucked the trend, climbing about 0.4% as Big Tech shares soared.
“Blowout big tech earnings, a better than expected China PMI and strong German retail sales are doing little to offset the disappointment surrounding fiscal package 4 negotiations,” Dennis DeBusschere, macro research analyst with Evercore ISI, said in a note.
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?)”
Collectively the four stocks were set to add about $200 billion to their total market cap, bringing it to more than $5 trillion combined.
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.
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— CNBC’s Patti Domm contributed to this report.
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