Apple shares under pressure.
Stocks opened lower Friday, with investors waving off strong quarterly results from technology heavyweights to focus on the uncertain outlook amid a surge in COVID-19 cases in the U.S. and Europe.
On the last trading day of the month, investors also face the prospect of the U.S. elections next Tuesday and no certainty about the timing of any further aid for businesses and consumers from Congress.
What are major indexes doing?
The Dow Jones Industrial Average DJIA, -0.44% was down 35.46 points, or 0.1%, at 26,623.65, while the S&P 500 SPX, -0.62% was off 9.33 points, or 0.3%, at 3,300.78. The Nasdaq Composite COMP, -1.35% dropped 70.21 points, or 0.6%, to 11,115.38.
The Dow on Thursday rose 139.16 points, or 0.5%, to close at 26,659.11, while the S&P 500 added 39.08 points, or 1.2%, to finish at 3,310.11. The Nasdaq Composite gained 180.72 points, or 1.6%, finishing at 11,185.59.
The Dow on Thursday snapped a four-day losing streak, but remained down 5.9% for the week, which would be its largest weekly decline since March. The S&P 500, which broke a three-day streak of declines, was down 4.5% through Thursday, enough for its biggest weekly decline since June.
What’s driving the market?
The so-called FAANG stocks, which have been key drivers of the stock market’s rally off the lows seen in March, were in focus after Facebook Inc., Apple Inc., Amazon.com Inc. and Google parent Alphabet Inc. all delivered upbeat results, including record-breaking sales, following Thursday’s closing bell. Netflix Inc. also got in on the act, announcing an increase in prices for U.S. customers.
While earnings and revenues for the tech juggernauts largely crushed expectations, guidance for the future was far more cautious, reflecting concerns about the long-term effect of COVID-19 on demand, said Boris Schlossberg, managing director at BK Asset Management, in a note.
“The big tech names have been driving all the stock market gains since the summer on the idea their performance was impervious too — or even helped by — the pandemic,” said Jasper Lawler, head of research at London Capital Group, in emailed comments. “The earnings beat expectations but by carrying the weight of the market, tech stocks were priced to perfection.”
Stocks have been dogged by worries over the economic outlook as European countries put in place tougher restrictions on activity in response to a surge in COVID-19 cases, while the U.S. saw the number of new daily infections hit records. The U.S. on Thursday saw more than 88,500 new cases on Thursday, a new daily high, The Wall Street Journal reported.
Nervousness over Tuesday’s U.S. elections also continues to hang over the market, analysts said. Democratic challenger Joe Biden has seen his lea over President Donald Trump narrow in national polls, underlining investor fears of an unclear or contested outcome that could drag on for weeks.
On the U.S. data front, personal income rose 0.9% in September, while spending increased 1.4%. Economists polled by MarketWatch had expected income to show a 0.5% rise, while spending was seen increasing 1.1%. Core inflation matched expectations with a 0.2% rise.
A final reading on an October consumer sentiment index at 10 a.m. ET is expected to come in at 81.2 versus a September reading of 80.4.
Which stocks are in focus?
- Amazon.com Inc. AMZN, -3.36% shares fell 1.9% after reporting record quarterly sales Thursday, which saw it already reach a record profit total in 2020 thanks to increased spending during the pandemic.
- Apple Inc. AAPL, -4.58% shares were down 3.5% after delivering record September quarter revenue to wrap up its fiscal year, but declining to provide a forecast.
- Shares of Facebook Inc. FB, -4.56% were off 2%. The social-media juggernaut topped forecasts for third quarter profit and revenue, despite a torrent of criticism that included a monthlong ad boycott in July.
- Shares of Google parent Alphabet Inc. GOOG, +5.40% GOOGL, +5.65% bucked the downbeat trend, rising 7% after the internet-search giant reported a return to rising ad sales and topped forecasts when it released its third-quarter results after Thursday’s close.
- Shares of Netflix Inc. NFLX, -2.40% were down 0.6% after the streaming giant said late Thursday it would increase prices in the U.S. following a surge in new subscriptions in the first few months of the COVID-19 pandemic
- Chevron Corp. CVX, +0.82% shares were up 0.3% after the energy giant on Friday said it swung to a net loss in the third quarter, but delivered adjusted earnings that beat expectations while revenues fell shy of expectations.
- Shares of Exxon Mobil Corp. XOM, -0.60% were down 1.4% after the oil giant swung to a loss and said revenue fell nearly 30%, as the COVID-19 pandemic took a bite, but delivered results that beat Wall Street expectations.
- Under Armour Inc. UAA shares were up nearly 10% after the athletic apparel and goods maker delivered earnings that beat expectations.
What are other markets doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.841% was off 0.2 basis point at 0.833%. Yields and bond prices move in opposite directions.
Oil futures remained under pressure, with the U.S. benchmark CL.1, -1.29% down 1.1% near $35.82 a barrel on the New York Mercantile Exchange Gold found support, with the December contract GC00, +0.95% up 1.1% at $1,889 an ounce.
The ICE U.S. Dollar Index DXY, -0.19%, a measure of the currency against a basket of six major rivals, was down 0.2%.
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