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Amazon down after signaling slower AWS growth
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Exxon jumps on record first-quarter profit
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Intel gains on upbeat view on margins
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U.S. consumer spending flat in March
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Indexes up: Dow 0.65%, S&P 0.63%, Nasdaq 0.37%
(Updates prices; adds details, comments)
By Sruthi Shankar and Ankika Biswas
April 28 (Reuters) - U.S. stock indexes gained on Friday
after strong earnings updates from Exxon and Intel dwarfed
worries over Amazon's slowdown warning, while economic data
bolstered expectations that the Federal Reserve would hike
interest rates next week.
Exxon Mobil Corp rose 2.2% to hit an all-time high
as the energy major reported a record first-quarter profit on
rising oil and gas output, aiding a near 2% advance in the S&P
energy index .
Chipmaker Intel Corp gained 4.6% after it said gross margins will improve in the second half of the year. Denting sentiment, Amazon.com Inc shed 3.6% as the company signaled its cloud growth would slow further, overshadowing its better-than-expected quarterly results, weighing on consumer discretionary stocks .
"Not every company can continue to take share and increase
margins ... if other companies are expanding their footprint in
that industry, some of the legacy players are bound to see some
share taken," said Ross Mayfield, investment strategy analyst at
Baird.
The benchmark S&P 500 was set for a second
consecutive monthly gain on better-than-expected earnings from
megacap companies including Alphabet Inc , Microsoft
Corp and Meta Platforms Inc .
Analysts expect first-quarter earnings for S&P 500 companies
to now fall 1.9% year-over-year compared with a 5.1% fall
expected at the start of April, according to latest Refinitiv
data.
Data showed U.S. consumer spending was unchanged in March,
while underlying inflation pressures remained strong, keeping
the Fed on course to hike interest rates by 25 basis points next
week, a move largely priced in by investors.
"These numbers needed to come in quite soft for the Fed to
potentially shift to pausing next week ... we can pretty much
pencil in 25-basis-point rate hike next week," Mayfield added.
Consumer spending data comes close on the heels
of numbers that showed U.S. economic growth slowed more than
expected in the first quarter, while plunging consumer
confidence in April heightened the risk of the economy falling
into a recession this year.
Meanwhile, the U.S. central bank issued a detailed and
scathing assessment of its failure to identify problems and push
for fixes at Silicon Valley Bank before the U.S. lender's
collapse, and promised tougher supervision and stricter rules
for banks.
The KBW Regional Banking index and the S&P 500 bank index gained over 1% each.
At 12:08 a.m. ET, the Dow Jones Industrial Average was up 220.39 points, or 0.65%, at 34,046.55, the S&P 500 was up 25.96 points, or 0.63%, at 4,161.31, and the Nasdaq
Composite was up 44.53 points, or 0.37%, at 12,186.77.
First Republic Bank shares tumbled 45.6% following a
report that the troubled lender was most likely headed for
receivership under the U.S. Federal Deposit Insurance
Corporation.
Snapchat-owner Snap Inc dived 17.8% as it warned
next quarter results could miss Wall Street targets, while
Pinterest Inc dropped 18.0% after the image-sharing
platform forecast second-quarter revenue growth below estimates.
Cloudflare Inc tumbled 24.6% on a downbeat revenue
forecast from the cloud services provider, while
Colgate-Palmolive Co jumped 4.5% after lifting its annual
organic sales forecast betting on consistent price hikes.
Advancing issues outnumbered decliners by a 2.93-to-1 ratio
on the NYSE and a 1.95-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and two new
lows, while the Nasdaq recorded 42 new highs and 97 new lows.
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
additional reporting by Johann M Cherian
Editing by Vinay Dwivedi)
