By Sue Chang and Chris Matthews, MarketWatch
Tech stocks in the spotlight as Facebook and Microsoft rally
U.S. stocks were mostly higher Thursday on the back of positive
tech-sector results highlighted by Facebook Inc. and Microsoft
Corp., but the Dow bucked the trend to head south after
disappointing 3M Co. earnings.
How did benchmarks fare?
The Dow Jones Industrial Average bounced off earlier lows but
remained down 111 points, or 0.4%, at 26,485. The S&P 500 index
edged up 2 points to 2,929 and the Nasdaq Composite Index rose 23
points, or 0.3%, to 8,125.
See:Stock markets are ringing up records and bonds are rallying
too
(http://www.marketwatch.com/story/stock-markets-are-ringing-up-records-and-bonds-are-rallying-too-but-that-is-not-supposed-to-happen-2019-04-24)
What's driving the market?
Guidance from U.S. companies on the state of the economy and the
business climate helped to underpin a mostly steady advance for
equity markets so far this week, but mounting signs of economic
weakness from Europe to Australia have cast a shadow over
markets.
Major global exporter South Korea (paywall)
(https://www.wsj.com/articles/south-korean-gdp-contracts-in-a-surprise-11556150433)
was one of the most recent indicators of a pullback in expansion as
the Asian country's first-quarter gross domestic product shrank by
0.3%, marking its worst performance in more than a decade. The data
come a day after a reading of consumer prices in Australia remained
flat in the first quarter, increasing expectations for a rate cut
from the Reserve Bank of Australia.
The spate of weakness has prompted central banks, including the
Reserve Bank of Australia, the Bank of Canada and the Bank of Japan
to adopt more dovish stances, which has, in turn, pushed the U.S.
dollar to a roughly two-year high, which is seen as holding the
potential to buffet multinational companies at some point.
A parade of earnings rolled on, with 3M (MMM), notably, driving
early market action
(http://www.marketwatch.com/story/3ms-stock-selloff-to-shave-about-127-points-off-the-dows-price-2019-04-25)
after the diversified industrial giant slashed its full-year 2019
guidance
(http://www.marketwatch.com/story/3ms-stock-tumbles-after-earnings-miss-and-slashed-outlook-to-cut-2000-jobs-2019-04-25)
and said it would cut 2,000 jobs. 3M's stock skidded 11%.
The number of Americans who applied for first-time jobless
benefits surged to 230,000 in the week ended April 20
(http://www.marketwatch.com/story/jobless-claims-jump-37000-to-230000-in-late-april-to-hit-2-12-month-high-2019-04-25),
up from 193,000 during the previous week, and above the 201,000
expected by economists polled by MarketWatch.
Orders for durable goods rose by 2.7% in March, the largest
one-month increase since last summer, the Commerce Department said
(http://www.marketwatch.com/story/durable-goods-orders-surge-27-to-7-month-high-business-investment-rebounds-2019-04-25).
A key measure of business investment, core durable orders, rose
1.3% in March, the third straight monthly increase.
National vacancy rates for rental homes remained steady at 7% in
the first quarter of 2019, compared with the previous three months,
while vacancy rates for homeowner housing fell 0.1%, according to
the Commerce Department
(https://www.census.gov/housing/hvs/files/currenthvspress.pdf).
What are strategist saying?
"It's been a solid week for earnings, but with expectations
being so low, companies that beat earnings aren't being rewarded as
much as companies that miss forecasts are getting smacked," said
J.J. Kinahan, chief market strategist at TD Ameritrade.
The market is in an uptrend with its bullish patterns intact,
said Frank Cappelleri, a strategist at Instinet LLC. "Over the last
week not much has changed: the market continues to rally--little by
little -- taking a cue from positive market happenings and ignoring
the negative headlines."
Read:Why tech stocks can continue to lead the S&P 500
higher, in two charts
(http://www.marketwatch.com/story/why-tech-stocks-can-continue-to-lead-the-sp-500-higher-in-two-charts-2019-04-24)
What stocks are in focus?
Facebook Inc. (FB) shares gained 6.4% after the social-media
company reported revenue and profit that topped Wall Street
estimates
(http://www.marketwatch.com/story/facebook-earnings-account-for-expected-multibillion-dollar-ftc-fine-but-stock-still-gains-2019-04-24).
However, Facebook did set aside some $3 billion for a potential
regulatory fine related to its handling of client data.
Shares of Microsoft Corp. (MSFT) rose 3.8% on solid fiscal
third-quarter results
(http://www.marketwatch.com/story/microsoft-stock-rises-after-cloud-strength-pushes-results-above-wall-street-estimates-2019-04-24),
helping the company join the $1 trillion market-cap club.
Tesla Inc.(TSLA) fell 3.1% after the electric-car maker produced
a wider-than-expected quarterly loss
(http://www.marketwatch.com/story/tesla-stock-falls-after-car-maker-misses-q1-views-2019-04-24).
Opinion:Elon Musk keeps moving Tesla's finish line
(http://www.marketwatch.com/story/elon-musk-keeps-moving-teslas-finish-line-2019-04-24)
Shares of Xilinix Inc. (XLNX) slumped 16% after the chip maker
beat lowered expectations
(http://www.marketwatch.com/story/xilinx-stock-plunges-after-earnings-beat-2019-04-24)
for fiscal fourth-quarter earnings and revenue. The stock has risen
64% year-to-date.
Southwest Airlines Co. (LUV) rose 2.4% after the air carrier
reported first-quarter earnings
(http://www.marketwatch.com/story/southwest-airlines-stock-surges-after-earnings-and-revenue-beat-but-load-factor-misses-2019-04-25)
that beat expectations and the company raised its unit costs
outlook.
Shares of Altria Group Inc. (MO) retreated 6.7% after its
first-quarter report
(http://www.marketwatch.com/story/altrias-stock-drops-after-earnings-revenue-fall-more-than-expected-2019-04-25).
Comcast Corp. (CMCSA) climbed 3% after the media company
reported first-quarter earnings that topped estimates
(http://www.marketwatch.com/story/comcast-beats-on-earnings-misses-on-revenue-2019-04-25)
but fell short of revenue expectations.
Hershey Co.'s stock (HSY) rose 3.8% after the
chocolate-and-snacks company reported first-quarter results that
exceeded Wall Street estimates for profit and revenue
(http://www.marketwatch.com/story/hershey-stock-soars-after-earnings-blow-past-estimates-2019-04-25).
United Parcel Service Inc.(UPS) shares skidded 6.7% after the
parcel company reported quarterly results that disappointed Wall
Street on earnings and revenue
(http://www.marketwatch.com/story/ups-shares-slide-after-earnings-and-sales-miss-2019-04-25).
How were other markets performing?
The Shanghai Composite lost 2.2% and the CSI 300 Index gave up
2.2%, while the Stoxx Europe 600 index, was down 0.2%.
Gold prices edged higher
(http://www.marketwatch.com/story/gold-steps-higher-as-us-stock-market-rally-looks-set-to-pause-2019-04-24)
while the ICE Dollar Index was generally flat
(http://www.marketwatch.com/story/dollar-extends-march-higher-as-global-central-banks-turn-dovish-2019-04-25).
--Mark DeCambre contributed to this report
(END) Dow Jones Newswires
April 25, 2019 13:10 ET (17:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.