Dow dragged lower by Chevron and Merck stock tumbles
U.S. stock-market indexes traded mostly higher early Friday partly due to better-than-expected quarterly results from four major technology companies such as Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Intel Corp. However, the main indexes were on track to end the week roughly where they started.
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On Friday, stock markets were also supported by data showing the U.S. economy expanded at a solid 3% annual pace (http://www.marketwatch.com/story/economy-grows-at-3-rate-in-third-quarter-despite-negative-impact-from-hurricanes-2017-10-27) for a second straight quarter despite damages from two hurricanes.
What are stock-market indexes doing?
The S&P 500 was up 7 points, or 0.3%, to 2,566, with the technology sector leading the gains, up 1.8%. Meanwhile, the energy sector was hit after disappointing results from Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).
The Dow Jones Industrial Average was under pressure, down 32 points, or 0.1%, at 23,367.
The Nasdaq Composite Index , meanwhile, advanced 75 points, or 1.2%, to 6,633, trading above its previous closing record, and marking its best point and percentage gain since late August, according to FactSet data.
What is driving the markets?
Late Thursday, four of the most valuable tech companies in the world--Amazon (http://www.marketwatch.com/story/amazon-revenue-hits-a-record-and-calms-investors-fears-2017-10-26)(AMZN), Google parent Alphabet (http://www.marketwatch.com/story/how-google-generated-a-few-extra-billion-dollars-2017-10-26)(GOOGL), Microsoft (http://www.marketwatch.com/story/microsoft-shares-gain-on-better-than-expected-fiscal-first-quarter-earnings-2017-10-26)(MSFT) and Intel (http://www.marketwatch.com/story/intel-raises-outlook-as-profit-gains-2017-10-26)(INTC)--blew past expectations for profit and revenue (http://www.marketwatch.com/story/amazon-google-microsoft-and-intel-find-billions-more-in-profit-2017-10-26) in their third-quarter reports.
Alphabet was up 4.7% opening at a record high, while Intel hits a record after gaining 4.7%. Microsoft jumped 7%, while Amazon rallied 8.7%.
Read:Alphabet could be headed for a $700 billion market cap (http://www.marketwatch.com/story/alphabet-heads-for-700-billion-market-cap-after-earnings-2017-10-26).
Plus:Amazon revenue hits a record and calms investors' fears (http://www.marketwatch.com/story/amazon-revenue-hits-a-record-and-calms-investors-fears-2017-10-26)
The pace of earnings releases slows somewhat Friday. Exxon shares fell 1.3%, while Chevron plunged 3% after earning results.
Merck & Co.(MRK) was among the weaker performers on the Dow, falling 3.5%.
Tesla earnings:Model 3 production, demand under the microscope (http://www.marketwatch.com/story/tesla-earnings-model-3-production-demand-under-the-microscope-again-2017-10-25)
See:Exxon earnings--chemicals, refining expected to show strong margins (http://www.marketwatch.com/story/exxon-earnings-chemicals-refining-expected-to-show-strong-margins-2017-10-24)
(http://www.marketwatch.com/story/amazon-revenue-hits-a-record-and-calms-investors-fears-2017-10-26)What are analysts saying?
"Many on the street are no doubt applauding today's GDP report as a blowout win. We now have the best two-quarter performance since early 2015. Does this give the Fed more ammo for a rate increase in December? You bet," said Mike Loewengart, VP, Investment Strategy at E*TRADE.
Loewengart cautioned, however that there are still "a ton of uncertainty swirling around the GOP tax plan, historically high valuations, and low inflation remains a lurking presence."
What are other markets doing?
The euro weakened after the European Central Bank decision to reduce and extend its monthly bond purchases.
Read:Draghi averts 'taper tantrum'-- for now--as ECB takes baby step toward end of QE (http://www.marketwatch.com/story/draghi-averts-taper-tantrumfor-nowas-ecb-begins-slow-walk-to-normalization-2017-10-26)
Plus:'Like stealing away from a party through the backyard'--analysts react to ECB move (http://www.marketwatch.com/story/like-stealing-away-from-a-party-through-the-backyardanalysts-react-to-ecb-move-2017-10-26)
The dollar was rising across the board (http://www.marketwatch.com/story/dollar-index-jumps-to-3-month-high-as-ecb-fueled-euro-slump-continues-2017-10-27) after the House of Representatives passed a budget resolution (http://www.marketwatch.com/story/house-narrowly-passes-budget-in-critical-step-for-republicans-tax-plan-2017-10-26) on Thursday, which was viewed as an encouraging sign for tax reform. The ICE Dollar Index was up 0.5% at 95.052. The yield on the 10-year Treasury note was unchanged at 2.45%.
And:Is the euro rally toast after ECB unveils dovish bond-buying cutback? (http://www.marketwatch.com/story/is-the-euro-rally-toast-after-ecb-unveils-dovish-bond-buying-reduction-2017-10-26)
Oil prices were mostly flat, trading at $52.59 a barrel, while gold was marginally softer at $1,267.90 an ounce.
Stocks in Asia mostly rallied (http://www.marketwatch.com/story/asia-stocks-get-inspiration-from-us-earnings-reports-and-european-stimulus-news-2017-10-26), fueled by strong tech earnings out of the U.S. after the close. However, Australian stocks fell after judges ousted five lawmakers (http://www.marketwatch.com/story/five-australian-lawmakers-including-deputy-prime-minister-ousted-government-loses-majority-2017-10-27), including the country's deputy leader, over an obscure constitutional law.
What's on the data docket?
A reading on consumer sentiment for October is due at 10 a.m. Eastern.
There are no Federal Reserve members scheduled to speak, as the central bank is in its "blackout period" ahead of its policy-setting meeting next week.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Which stocks are in focus?
Macy's Inc. (M) fell 4.9%, with Kohl's Corp.(KSS) down 3.8% after fellow department store J.C. Penney Co. Inc.(JCP) issued a profit warning for the third quarter and full year. (http://www.marketwatch.com/story/macys-and-kohls-shares-sink-after-jc-penney-profit-warning-2017-10-27)J.C. Penney shares plunged 21%.
Shares of Mattel Inc.(MAT) skidded 15%, after a similar tumble late Thursday. The toy maker posted a surprise loss for the quarter, on a sharp decline in sales for its American Girl dolls.
Read:American Girl dolls are dying, and taking Mattel with them (http://www.marketwatch.com/story/mattel-shares-plunge-as-not-even-american-girl-is-safe-from-sales-decline-2017-10-26)
Gilead Sciences Inc.(GILD) shares fell 3.7% after earnings fell by less than expected (http://www.marketwatch.com/story/gilead-revenue-falls-13-worst-yet-to-come-2017-10-26) late Thursday. But executives warned that the worst has yet to come for sales of its hepatitis C treatments.
Shares of Huntsman Corp.(HUN) rose 2% trading on the heels of the failure of its proposed merger (http://www.marketwatch.com/story/clariant-huntsman-call-halt-to-planned-merger-2017-10-27) with Swiss chemical company Clariant AG (CLN.EB). Clariant shares fell 1.9% in European trading after both companies called the deal off on activist pressure.
Apple Inc.(AAPL) rose 1%, with social media frenzied as advance orders (http://www.marketwatch.com/story/tech-earnings-the-new-gadgets-that-will-matter-this-holiday-season-2017-10-20) for the iPhone X began early Friday. Estimates by two market-research firms said the iPhone 8 saw the weakest sales (http://www.marketwatch.com/story/apparent-weakness-in-iphone-8-sales-turns-up-pressure-on-apple-as-iphone-x-preorders-kick-off-friday-2017-10-26) of any of the company's smartphones in recent years. Apple will report fourth-quarter results on Nov. 2.
(END) Dow Jones Newswires
October 27, 2017 09:52 ET (13:52 GMT)