MARKET SNAPSHOT: U.S. Stocks Mixed After GDP Data, Amazon Weighs
October 28 2016 - 10:37AM
Dow Jones News
By Sara Sjolin, MarketWatch , Ryan Vlastelica
Amazon slumps after results, offsetting Alphabet
U.S. stocks were little changed on Friday, as a strong read on
economic growth was overshadowed by a mixed batch of corporate
earnings, which muddied the issue of whether stock valuations were
justified.
A number of high profile companies have reported since
Thursday's close, and the results provided little in the way of
clarity. Among energy companies, Chevron Corp(CVX) rallied while
Exxon Mobil Corp.(XOM) fell. In the tech space, a rally in Alphabet
Inc. (GOOGL), the parent company of Google, was offset by a sharp
decline in Amazon.com Inc.(AMZN).
A preliminary read of third-quarter gross domestic product
showed the fastest pace of expansion since mid-2014
(http://www.marketwatch.com/story/gdp-hits-29-in-biggest-gain-since-mid-2014-2016-10-28),
with the economy growing 2.9%, in line with expectations. The
report showed acceleration from the growth rate of 1.4% seen in the
previous quarter.
The data was seen as doing little to change the view that the
Federal Reserve would raise interest rates at its December meeting.
The U.S. central bank has said it would raise rates when it deems
the economy strong enough to withstand such a move.
"We all know this is a 2% economy, with some deviation from that
from quarter to quarter. This won't change anything from the point
of view of the Fed," said Tom Wirth, executive vice president of
the wealth management group for Chemung Canal Trust Co. "Today is
mostly driven by earnings, but even there some have been good and
some have missed [expectations]."
The Fed is meeting next week, but expectations for a rate
increase are low ahead of the Nov. 8 election. Instead, markets are
pricing in a tightening at the December meeting, with the CME Group
data showing an 83% probability of a hike in December.
In other data released on Friday, consumer sentiment
unexpectedly dipped from the prior month.
The Dow Jones Industrial Average rose 31 points, or 0.2%, to
18,200. The S&P rose 1 point to 2,133, essentially unchanged on
the day. The Nasdaq Composite Index , which is heavily weighted
toward technology companies, fell less than a point to 5,215.5.
With the day's move, the Dow is expected to rise 0.4% on the
week. Both the S&P 500 and Nasdaq are set for a weekly
loss.
Amazon was one of the biggest movers of the day, dropping 4.7%
to $779.98 following disappointing earnings reported late Thursday
(http://www.marketwatch.com/story/amazon-posts-smaller-than-expected-profit-increase-2016-10-27-164855144).
While the e-commerce giant's revenue came in line with forecasts,
earnings were below expectations.
On the upside, Alphabet rose 1.6% to $830.27 following
stronger-than-expected earnings out on Thursday
(http://blogs.marketwatch.com/thetell/2016/10/27/alphabet-expected-to-report-stronger-earnings-and-sales-live-blog/).
In the energy sector, both Chevron and Exxon reported sharp
drops in quarterly earnings, hurt by weak oil prices. However,
Chevron rose 2.4% as it nonetheless returned to profitability
(http://www.marketwatch.com/story/chevron-returns-to-profit-though-revenue-slides-2016-10-28)
following three straight quarters of losses. The stock was the
biggest percentage gainer among Dow components. Exxon fell 1.8%
after reporting its ninth straight quarter of falling revenue
(http://www.marketwatch.com/story/exxon-mobil-profit-and-revenue-slide-again-2016-10-28-84853357).
Read:This market barometer says Trump still has a chance at the
White House
(http://www.marketwatch.com/story/this-market-barometer-says-trump-still-has-a-chance-at-the-white-house-2016-10-28)
Among other movers, Baker Hughes Inc.(BHI) rallied 5.4% after
The Wall Street Journal reported that General Electric Co.(GE) is
in talks to merge its oil-and-gas business with the oil-services
company
(http://www.marketwatch.com/story/general-electric-said-to-explore-baker-hughes-purchase-2016-10-27).
Hershey Co.(HSY) gained 5.3% after the chocolate company
reported third-quarter earnings that beat estimates
(http://www.marketwatch.com/story/hershey-third-quarter-earnings-beat-estimates-2016-10-28).
Amgen Inc.(AMGN) dropped 8.4% after the biotechnology company
late Thursday beat third-quarter earnings expectations and raised
its profit outlook, but kept its sales outlook virtually unchanged
(http://www.marketwatch.com/story/amgen-beats-profit-expectations-and-raises-its-outlook-2016-10-27).
U.S.-listed shares of Sanofi SA(SAN.FR) (SAN.FR) jumped 4.2%
after the French drug giant lifted its profit outlook
(http://www.marketwatch.com/story/sanofi-raises-profit-outlook-after-upbeat-results-2016-10-28).
See:
Other markets: Asia markets closed mostly lower
(http://www.marketwatch.com/story/most-asian-markets-down-but-nikkei-trades-up-2016-10-27),
but with Japan's Nikkei 225 bucking the trend. The Japanese index
ended 0.6% higher as the yen weakened after data showed consumer
prices dropped in September.
The ICE dollar index fell 0.2% following the GDP release.
Markets in Europe traded firmly lower
(http://www.marketwatch.com/story/european-stocks-drop-as-anheuser-busch-cuts-view-french-data-disappoint-2016-10-28)
and heading toward weekly losses.
Oil prices slumped
(http://www.marketwatch.com/story/oil-prices-hold-steady-ahead-of-weekend-opec-meeting-2016-10-28)
0.9%, while metals where mixed
(http://www.marketwatch.com/story/gold-futures-drift-lower-ahead-of-us-gdp-reading-2016-10-28).
(END) Dow Jones Newswires
October 28, 2016 10:22 ET (14:22 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.