Sector Investing

[ReturntoSender]

Amazon Lifts S&P 500 and Nasdaq Composite to New Closing Highs
26-Apr-19 16:20 ET
Dow +81.25 at 26543.33, Nasdaq +27.72 at 8146.39, S&P +13.71 at 2939.88

https://www.briefing.com/investor/markets/stock-market-update/2019/4/26/amazon-lifts-s-and-p-500-and-nasdaq-composite-to-new-closing-highs.htm

[BRIEFING.COM] The S&P 500 (+0.5%) and Nasdaq Composite (+0.3%) set new closing highs on Friday, as shares of Amazon (AMZN 1950.63, +48.38, +2.5%) and strong Q1 GDP data helped the market steer past early weakness. The underperformance in the energy and semiconductor stocks, however, put a lid on further gains.

The Dow Jones Industrial Average increased 0.3%, and the Russell 2000 outperformed with a gain of 1.0%.

Amazon easily topped earnings expectations and announced that one-day shipping will be the new standard for Amazon Prime members. The results underpinned the stock's outperformance, while the shipping news undercut shares of Wal-Mart (WMT 101.53, -1.99, -1.9%) and Target (TGT 77.12, -4.62, -5.7%).

The big moves in Amazon and Ford (F 10.41, +1.01, +10.7%), which also provided solid results, boosted the S&P 500 consumer discretionary sector (+0.9%). The health care (+1.0%), financials (+0.9%), and consumer staples (+0.9%) sectors also outperformed.

Signs that the U.S. economy is exhibiting solid growth and muted inflation pressures was another positive consideration for equities and U.S. Treasuries alike. The advance estimate for first quarter GDP increased 3.2% (Briefing.com consensus 1.9%), while the GDP Price Deflator was up just 0.9% (Briefing.com consensus 1.4%) after increasing 1.7% in the fourth quarter.

The 2-yr yield declined four basis points to 2.27%, and the 10-yr yield declined three basis points to 2.51%. The U.S. Dollar Index declined 0.2% to 98.04.

Intel (INTC 52.43, -5.18), meanwhile, dropped 9.0% after issuing disappointing guidance. Its lower guidance also contributed to the declines in the S&P 500 information technology sector (-0.4%) and the Philadelphia Semiconductor Index (-0.8%).

The S&P 500 energy sector (-1.2%) underperformed following a decline in oil ($63.23/bbl, -$1.94, -3.0%), which was pressured by President Trump telling OPEC to tame fuel costs. Underwhelming earnings reports from Exxon Mobil (XOM 80.49, -1.73, -2.1%) and Chevron (CVX 117.10, -0.80, -0.7%) also weighed on the space.

Reviewing Friday's economic data, which included the advance estimate for first quarter GDP and the final reading for the University of Michigan Index of Consumer Sentiment for April:

Real GDP increased at an annual rate of 3.2% (Briefing.com consensus 1.9%), according to the advance estimate for first quarter GDP. The GDP Price Deflator was up just 0.9% (Briefing.com consensus 1.4%) after increasing 1.7% in the fourth quarter.
The key takeaway from the report is that it reinforced the market's Goldilocks view of the U.S. economy, which is exhibiting solid growth and muted inflation pressures.
The final reading for the University of Michigan Index of Consumer Sentiment for April edged up to 97.2 (Briefing.com consensus 96.7) from the preliminary reading of 96.9. That was down from the final reading of 98.4 for March, but right in-line with the average for the past 28 months.
The key takeaway from the report is that 44% of consumers said they were feeling better about their financial prospects for the year ahead. That is the highest level for that reading since 2004 and another indication that should quiet recession talk.

Looking ahead, investors will receive the PCE Price Index for February and March on Monday.

Nasdaq Composite +22.8% YTD
Russell 2000 +18.0% YTD
S&P 500 +17.3% YTD
Dow Jones Industrial Average +13.8% YTD