Categories: Tech News

Stocks rise as Apple’s boom outweighs Amazon’s loss

U.S. stocks overcame Amazon’s earnings miss to charge higher on Friday, boosted by a beat from Apple that helped offset some concerns about a tough week for Big Tech’s third-quarter results.

The S&P 500 (^GSPC) rallied 2.1%, while the Dow Jones Industrial Average (^DJI) rallied nearly 750 points, or 2.3%, putting the index on pace for a fourth straight week of earnings The tech Nasdaq Composite ( ^IXI ) rose 2.4%. The moves came even as Treasury yields climbed back above 4%.

On the economic data side, the Federal Reserve’s preferred measure of inflation showed that prices are still heating up across the US economy.

The core price index for personal consumption expenditures (PCE) rose 0.5% in September from a month earlier, the Commerce Department said Friday, a slight slowdown from August’s month-on-month pace of 0 .6% The indicator showed an increase of 5.1% year-on-year, an acceleration from the 4.9% year-on-year seen in August. Economists polled by Bloomberg had expected increases of 0.5 percent and 5.2 percent, respectively.

Personal income rose 0.4% for the month and consumer spending rose 0.6%, compared with economists’ estimates of 0.4% increases for each measure.

Shares of Amazon ( AMZN ) fell about 9% on Friday after the e-commerce giant issued fourth-quarter sales guidance that missed Wall Street estimates and disappointing third-quarter results. The crisis marks the second consecutive quarter in which the company’s weak finances have caused double-digit percentage drops in its share price.

Meanwhile, Apple ( AAPL ) provided a “dim light in an otherwise dark earnings season,” outperforming its Big Tech peers as it struggled with macroeconomic headwinds posed by inflation, rising interest rates ‘interest and currency headwinds. The company posted record revenue but missed analysts’ projections in key categories such as the iPhone and services. Shares rose 7% in intraday trading, marking the tech giant’s best day since July 2020.

Elsewhere in the tech spotlight, Elon Musk has taken ownership of Twitter ( TWTR ) after a long-running bid to buy the social media platform ended late Thursday. Tesla’s CEO fired top executives after completing his $44 billion takeover of the company and announced plans to reverse lifetime website bans.

The Twitter logo and a photo of Elon Musk are seen through a magnifying glass in this illustration taken on October 27, 2022. REUTERS/Dado Ruvic/Illustration

A busy start to Friday for investors was also marked by other reports from energy conglomerates Exxon Mobil ( XOM ) and Chevron ( CVX ), which reported earnings and revenue that beat Wall Street estimates, lifting shares of each name by approximately 1.4% and 0.6%, respectively.

SoFi’s chief investment strategist Liz Young said in a note that she expects more downward revisions and other notable misses this quarter and next, which are likely to further challenge the market. Young noted, however, that on the bright side, this means investors can check the “earnings are hit” box.

“As we move through this process, then we’re probably going to see the economy slip in a little more dramatic way than we’ve seen so far,” Young said. “Several classic warning signs of a recession are already in place, and risks still ahead make the likelihood of a real recession closer.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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