Friday, May 24, 2024

Big Tech surge props up Wall Street, though caution reigns

by Associated Press

NEW YORK (AP) — Strong gains for Big Tech stocks are helping to prop up Wall Street in early Friday trading following blowout profit reports from some of the market’s most influential companies.

The S&P 500 was 0.1% higher after the first half hour of trading, on track to close out its fourth straight winning month. The Dow Jones Industrial Average was down 28 points, or 0.1%, at 26,285, as of 10 a.m. Eastern time, and the big gains for tech stocks had the Nasdaq composite up 0.8%.

Despite the steadiness for indexes, caution was still clearly present across markets as the coronavirus pandemic continues to cloud the economy’s prospects, along with gridlock in Congress that’s holding up more aid for it. The 10-year Treasury yield hovered close to its lowest level since it dropped to a record low in March. Gold also briefly rose above $2,000 per ounce for the first time, while nearly three out of four stocks in the S&P 500 were lower.

The market’s gains once again were largely powered by big tech-oriented stocks. Amazon, Apple and Facebook each reported stronger profit for the latest quarter than Wall Street expected late Thursday, and each rose at least 4% in morning trading. These are three of the biggest companies in the world, making up nearly 13% of the S&P 500 themselves, so their movements hold great sway over indexes.

Without the trio, the S&P 500 would have been down about half a percent in morning trading. Apple was particularly influential following what one analyst called a “Picasso-like performance” for its latest quarter.

Google’s parent company, another behemoth in the market, also reported stronger profit than analysts had forecast, but its stock stumbled.

All four stocks nevertheless are still up more than 10% so far in 2020, towering over the S&P 500’s gain of less than 1%. Amazon is up 72%.

Not only are they growing faster than the rest of the market, some investors have even been begun seeing them as safer bets than other stocks because the pandemic is pushing more people online and directly into their wheelhouses. It’s a far cry from 20 years ago when tech stocks were seen as the riskiest investments.

The gains for tech helped to mask sharp weakness for companies that most need the economy to reopen and the pandemic to subside, such as in the travel industry.

Expedia Group slumped 8.1% for the largest loss in the S&P 500 after it reported even weaker quarterly results than Wall Street expected. Its CEO called it “likely the worst quarter the travel industry has seen in modern history.”

MGM Resorts fell 5.1%, and Norwegian Cruise Line lost 3.4%.

The yield on the 10-year Treasury ticked up to 0.55% from 0.54% late Thursday.

Gold for delivery in December rose 0.8% to $1,983.10 per ounce after earlier climbing as high as $2,005.40.

Benchmark U.S. crude rose 0.6% to $40.16 per barrel. Brent crude, the international standard, added 0.1% to $43.31 per barrel.

In Europe, Germany’s DAX returned 0.7%, and France’s CAC 40 was close to flat. The FTSE 100 in London slipped 0.5%.

In Asia, Japan’s Nikkei 225 fell 2.8%, South Korea’s Kospi dropped 0.8% and the Hang Seng in Hong Kong lost 0.5%.

You may also like

Update Required Flash plugin