By Chibuike Ogu
NEW YORK (Reuters) – U.S. stocks closed higher on Friday, supported by modest inflation data and gains in large-cap growth stocks after strong quarterly results from tech giants Alphabet and Microsoft.
Investors cheered Alphabet's first dividend, $70 billion share buyback program and better-than-expected first-quarter results. The company's stock price rose 10% to a record high, and parent company Google's market value exceeded $2 trillion.
Microsoft shares rose 1.8% after third-quarter sales and profits beat Wall Street expectations, helped by gains from the adoption of artificial intelligence (AI) across its cloud services.
Other mega-growth stocks also closed higher. Amazon.com Inc. rose 3.4%, Nvidia Inc. rose 5.8% and Meta Platforms Inc. rose 0.4%. However, Apple fell 0.3% and Tesla closed 1.1% lower. On Wednesday, Meta's results disappointed investors, even as the company gradually ramped up spending on AI.
Six of the 11 major S&P 500 sectors finished higher, led by gains in communications services, technology, consumer staples and materials.
The S&P 500 and Nasdaq posted their biggest weekly gains since early November 2023. The benchmark S&P 500 ended a three-week decline, and the Nasdaq ended a four-week losing streak.
“Microsoft and Google's earnings reports allayed many concerns about the fact that Meta's spending on data centers and AI, which it raised in the previous day, would compress profits,” said Tom Plumb, president and lead portfolio manager. Stated. At the Plum Fund in Madison, Wisconsin.
“Both Google and Microsoft have indicated that they still expect margins to expand in their current capital plans. This has allayed many of the concerns people had about the growth of data computing. ” Plum added.
According to data from the U.S. Department of Commerce, the monthly inflation rate rose modestly in March on an annualized basis, but on a monthly basis, it was in line with expectations.
The report brought some relief to financial markets, which had been spooked by concerns about stagflation, a day after data showed inflation soaring and economic growth slowing in the first quarter.
With this data, money markets are increasingly pricing in the possibility that the US Federal Reserve will cut interest rates in September. The yield on the benchmark 10-year U.S. Treasury note fell in response to the statistics, and was recently at 4.6630%.
The Dow Jones Industrial Average rose 153.86 points, or 0.40%, to 38,239.66, the S&P 500 rose 51.54 points, or 1.02%, to 5,099.96, and the Nasdaq Composite Index rose 316.14 points, or 2.03%, to 15,927.90.
Snap's stock price rose nearly 28% after the company reported better-than-expected revenue and user growth in the first quarter. Pinterest stock also ended the day up 4%.
Exxon Mobil fell nearly 3%, with first-quarter profit down 28% from a year earlier, as the largest U.S. oil company missed analysts' expectations.
Intel fell 9.1% after the semiconductor maker reported lower-than-expected second-quarter sales and profit estimates. Intel is facing weak demand for traditional data center and PC chips.
Advancing issues outnumbered declining issues on the New York Stock Exchange by a 2.25-to-1 ratio. Advancing issues outnumbered declining issues on the Nasdaq by a 1.84 to 1 ratio, resulting in 2,685 advancing issues and 1,460 declining issues.
The S&P 500 recorded 21 new highs and 8 new lows in 52 weeks, and the Nasdaq recorded 59 new highs and 88 new lows.
Volume on U.S. exchanges was 9.88 billion shares, compared with an average of 11.01 billion shares over the past 20 days.
(Reporting by Chibuike Oguh in New York; Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel and David Gregorio)
