New York (Reuters) – Wall Street’s three major indexes rose slightly on Friday as Intel’s weak results put the techology sector under pressure and the energy index tumbled along with the price of oil and mixed first-quarter GDP data gave investors some pause.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid
Dragging down the three main indexes was Intel Corp, which slumped 10.4% after it cut its full-year revenue forecast and missed the sales estimate for its key data center business in its quarterly report late Thursday.
“We’re not going to move significantly higher until we have clarity on the current earnings situation,” said Michael Geraghty market strategist at Cornerstone Capital in New York.
“Can earnings estimates improve enough to support higher stock prices without further price to earnings multiple expansion.”
Before the market open, U.S. Commerce Department data showed gross domestic product rising faster than expected due to high inventories while consumer and business spending slowed sharply, and homebuilding investment contracted for a fifth straight quarter.
“We had a pretty big beat on GDP today, but some underlying numbers are giving investors a pause on where they see future growth coming from given the consumer spending levels,” said Mike Loewengart, vice president of investment strategy at E*Trade Financial.
“Earnings have largely been good, but there have been some misses, which investors are trying to make sense of and that’s why we have this sideways move in markets.”
At 3:00 p.m. EDT (1900 GMT), the Dow Jones Industrial Average was up 9.3 points, or 0.04%, at 26,471.38, the S&P 500 had gained 5.75 points, or 0.20%, to 2,931.92 and the Nasdaq Composite added 8.29 points, or 0.1%, to 8,126.97.
Out of the S&P 500’s 11 major sectors, energy was the biggest percentage loser with a 1.7% drop as oil prices sank more than 3 percent after U.S. President Donald Trump again pressured the Organization of the Petroleum Exporting Countries to raise crude production to ease gasoline prices. [O/R]
Also, shares in oil giant Exxon Mobil Corp fell 3% after its quarterly profit missed estimates.
The S&P’s heavy weight technology index was the biggest drag on the benchmark, with a 0.6% decline
Despite weakness in some big companies more than three-quarters of the 229 S&P 500 companies, which have reported so far, have topped earnings estimate, according to Refinitiv data.
The consensus forecast for the S&P 500 dipped again to a 0.3% year-over-year decline after turning flat earlier in the week. Still it was an improvement on the 2.3% drop estimated at the start of the quarter.
Improving confidence in earnings had helped push the S&P 500 closer to its all-time high, reached in September. Stocks have rallied this year on hopes of a U.S.-China trade resolution and a turnaround in the Federal Reserve’s stance to abandon further interest rate hikes this year.
The S&P’s biggest boost on Friday was from the consumer discretionary sector, which rose 0.8%.
Offering support was Amazon.com Inc, which rose 2.4% after the e-commerce giant’s quarterly profit doubled and beat Wall Street estimates though its second quarter guidance was lower than expectations.
Also Ford Motor Co surged 10.5% and was the biggest percentage gainer on the S&P after the automaker posted better-than-expected quarterly earnings largely due to strong pickup truck sales in its core U.S. market.
Walt Disney Co rose 1.6% after Marvel Studios superhero spectacle “Avengers: Endgame” hauled in a record $60 million at U.S. and Canadian box offices during its Thursday night debut.
Advancing issues outnumbered declining ones on the NYSE by a 2.02-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favored advancers.
The S&P 500 posted 34 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 66 new highs and 34 new lows.
Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta, Anil D’Silva and Tom Brown