Wall Street’s main indexes soared on Friday as a jump in shares of Apple on upbeat results provided enough of a boost to outweigh a dour warning from Amazon.
In morning trading, the Dow Jones Industrial Average leaped 588 points, or 1.8%, to 32,660, the S&P 500 was up 1.5% and the Nasdaq was up 1.6%.
Apple shares jumped 6.2% as the iPhone maker’s fourth-quarter results showed some resilience, but it cautioned revenue growth could see some pressure in the December quarter.
Amazon 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, Meta Platforms and Google-parent Alphabet, 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 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 US 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.
Intel jumped 7.4% after the chipmaker cut its capital spending forecast, while T-Mobile US rose 6.6% after raising its annual forecast for wireless subscriber additions.
Twitter was delisted from the New York Stock Exchange after Tesla chief Elon Musk completed his $44 billion acquisition of the social media company. Shares of Tesla were down 2.8%.
[Written in collaboration with other media outlets with information from the following sources]
