Oil companies Chevron and Exxon Mobil will be in the earnings spotlight at the end of a busy week.
David McNew/Getty ImagesThe stock market was inching higher Friday even after Apple and Amazon.com reported disappointing quarterly results, closing out a strong month for stocks.
In afternoon trading, the Dow Jones Industrial Average was up 65 points, or 0.2%, after the index climbed 239 points Thursday to close at 35,780. The S&P 500 and the Nasdaq Composite were both up 0.1% after declining earlier in the session. Both the Nasdaq and the S&P hit record highs at the close Thursday.
The S&P 500 has gained 5.5% for the month of October, which saw the market rebound from an early autumn drawdown. In September, concerns about supply chain constraints and rising bond yields pushed stocks lower.
Several factors enabled stocks to rebound this month. Bond yields have paused in their larger ascent. Companies have mostly beat earnings estimates . And while risks still remain—yields aren’t necessarily finished rising and supply chain constraints aren’t easing much—retail investors bought the dip.
“They [retail investors] saw the 5% [market decline] and so when they see the opportunity to buy down 5% they step in and they do that,” said John Ham, wealth advisor at New England Investments & Retirement Group.
But Friday, Big Tech earnings put the issue of shortages on center stage.
Apple (ticker: AAPL) stock fell 2.1% after the company reported a profit of $1.24 a share, in line with estimates, on sales of $83.4 billion, below expectations for $84.9 billion. The company said supply chain constraints due to chip shortages were worse than expected. iPhone sales were $38.9 billion, below expectations for $41.5 billion.
Amazon (AMZN) stock dropped 2.9% after the company reported a profit of $6.12 a share, missing estimates of $8.92 a share, on sales of $110.8 billion, below expectations for $111.6 billion. The company said labor shortages, higher shipping costs and other rising expenses are eating into profits. Management also guided for current quarter sales of $135 billion at the midpoint of its range, below analysts’ expectations for $142 billion.
While the major indexes were up, the stock market wasn’t exactly having a strong day. Only about half of S&P 500 stocks were in the green, according to FactSet.
Overseas, the Shanghai Composite rose 0.8%, outperforming other Asian indexes. Sentiment was buoyed by news that embattled and highly indebted property developer China Evergrande (3333.H.K.) had made payment on an offshore bond coupon just before the hard deadline—staving off formal default for now.
In Europe, Germany’s DAX fell 0.1% after gross domestic product data from the eurozone showed Germany’s economy grew 1.8% quarter-on-quarter in the third quarter—less than expected. Analysts noted that growth seems to be slowing in Germany, the largest economy in Europe, as it fails to keep pace with the likes of France and GDP remains 1% below prepandemic levels.
In cryptocurrency markets, Ethereum —the leading crypto asset after Bitcoin—hit an all time high above $4,400, according to data from CoinDesk.
Here are six stocks on the move Friday:
Chevron (CVX) gained 1.1% after the company reported a profit of $2.96 a share, beating estimates of $2.21 a share, on sales of $44.7 billion, above expectations for $40.5 billion.
Starbucks (SBUX) stock dropped 7% after the company reported a profit of $1, beating estimates of 99 cents, on sales of $8.1 billion, below expectations for $8.2 billion.
Newell Brands (NWL) stock rose 7.1% after the company reported a profit of 54 cents a share, beating estimates of 50 cents a share, on sales of $2.79 billion, above expectations for $2.78 billion.
Caterpillar (CAT) stock rose 0.4% after getting upgraded to Buy from Neutral at UBS.
Synchrony Financial (SYF) stock rose 0.2% after getting upgraded to Buy from Neutral at Citigroup.
U.S. Steel (X) soared 15% following third-quarter earnings Thursday that smashed expectations and an announcement that the company would raise its dividend.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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October 29, 2021 at 11:16PM
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Stock Market Today: S&P 500, Nasdaq Steady After Apple and Amazon Woes - Barron's
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