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Mixed Earnings News May Push Markets in Opposite Directions

By Investors Hub

The major U.S. index futures are pointing to a mixed opening on Friday, as the Nasdaq futures are moving higher but the Dow and S&P 500 futures are moving to the downside.

A mixed batch of earnings news may push the markets in opposite directions, with tech giants such as Amazon (AMZN), Microsoft (MSFT) and Intel (INTC) reporting better than expected quarterly results, while energy giant ExxonMobil (XOM) reported weaker than expected earnings.

Traders are also digesting a report from the Commerce Department showing U.S. economic growth slowed by less than expected in the first quarter of 2018.

Stocks moved sharply higher over the course of the trading session on Thursday, as traders reacted positively to latest batch of earnings news. The major averages climbed firmly into positive territory after ending the previous session mixed.

The major averages pulled back off their best levels in the final hour of trading but held on to strong gains. The Dow jumped 238.51 points or 1 percent to 24,322.34, the Nasdaq soared 114.94 points or 1.6 percent to 7,118.68 and the S&P 500 surged up 27.54 points or 1 percent to 2,666.94.

The rally on Wall Street came following the release of upbeat earnings news from several big-name companies, with shares of Facebook (FB) surging up by 9.1 percent.

The jump by Facebook came after the social media giant reported first quarter results that beat analyst estimates on both the top and bottom lines.

Chipmaker Advanced Micro Devices (AMD) also moved sharply higher after reporting better than expected first quarter results.

Shares of Visa (V) also moved to the upside after the credit card giant reported fiscal second quarter results that exceeded expectations and raised its full-year guidance.

Stocks also benefited from a pullback by treasury yields, with the yield on the benchmark ten-year moving lower after ending the previous session above 3 percent for the first time in well over four years.

The drop by treasury yields came despite the release of some upbeat economic data, including a report from the Labor Department showing initial jobless claims fell to their lowest level in nearly five decades in the week ended April 21st.

The report said initial jobless claims dropped to 209,000, a decrease of 24,000 from the previous week’s revised level of 233,000. Economists had expected jobless claims to edge down to 230,000.

With the much bigger than expected decrease, jobless claims slid to their lowest level since hitting 202,000 in December of 1969.

A separate report from the Commerce Department showed another jump in orders for transportation equipment contributed to a bigger than expected increase in durable goods orders in the month of March.

The Commerce Department said durable goods orders surged up by 2.6 percent in March after spiking by an upwardly revised 3.5 percent in February.

Economists had expected durable goods orders to climb by 1.6 percent compared to the 3.0 percent jump that had been reported for the previous month.

Excluding the skyrocketing orders for transportation equipment, however, durable goods orders came in unchanged in March compared to a 0.9 percent increase in February. Ex-transportation orders had been expected to rise by 0.5 percent.

Retail stocks showed a substantial move to the upside on the day, driving the Dow Jones Retail Index up by 2.5 percent. Despite the gain, the index remained stuck in a recent trading range.

Significant strength was also visible among semiconductor stocks, as reflected by the 2.1 percent jump by the Philadelphia Semiconductor Index. The index bounced off its lowest closing level in well over two months.

Steel, energy, biotechnology, and real estate stocks also saw considerable strength on the day, while transportation stocks showed a notable move to the downside.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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