Oil companies Chevron and Exxon Mobil will be in the earnings spotlight at the end of a busy week.
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The stock market was mostly lower Friday after Apple and Amazon.com reported disappointing quarters, driven by supply chain constraints and higher costs. That brought their stocks—and the major indexes—down.
By midmorning, the Dow Jones Industrial Average was down 24 points, or 0.1%, after the index climbed 239 points Thursday to close at 35,780. The S&P 500 and Nasdaq Composite
—which both hit record highs at the close Thursday— dipped 0.3% and 0.5%, respectively.
Apple (ticker: AAPL) stock fell 3.1% after the company reported a profit of $1.24 a share, in line with estimates, on sales of $83.4 billion, below expectations for $84.9 billion. The company said supply chain constraints due to chip shortages were worse than expected. iPhone sales were $38.9 billion, below expectations for $41.5 billion.
Amazon (AMZN) stock dropped 3.8% after the company reported a profit of $6.12 a share, missing estimates of $8.92 a share, on sales of $110.8 billion, below expectations for $111.6 billion. The company said labor shortages, higher shipping costs and other rising expenses are eating into profits. Management also guided for current quarter sales of $135 billion at the midpoint of its range, below analysts’ expectations for $142 billion.
“On earnings, AAPL and AMZN both underwhelmed investors and those stocks fell 3% and 5% after hours and the sheer weight of those names in the S&P 500 is weighing on the entire index,” wrote Tom Essaye, founder of Sevens Report Research.
While Big Tech pulled the the major indexes down, many stocks were rising. The Invesco S&P 500 Equal Weight Exchange-Traded Fund (RSP), which weights each stock in the index equally and therefore shows the breadth of stocks rising or falling, was flat.
The 10-year Treasury yield rose to as high as 1.61% from a close of 1.58% Thursday, signifying that markets are reflecting increased optimism on longer-term economic demand and inflation.
Overseas, the Shanghai Composite rose 0.8%, outperforming other Asian indexes. Sentiment was buoyed by news that embattled and highly indebted property developer China Evergrande (3333.H.K.) had made payment on an offshore bond coupon just before the hard deadline—staving off formal default for now.
In Europe, Germany’s DAX underperformed, falling 0.4% after gross domestic product data from the eurozone showed Germany’s economy grew 1.8% quarter-on-quarter in the third quarter—less than expected. Analysts noted that growth seems to be slowing in Germany, the largest economy in Europe, as it fails to keep pace with the likes of France and GDP remains 1% below prepandemic levels.
In cryptocurrency markets, Ethereum
—the leading crypto asset after Bitcoin—hit an all time high above $4,400, according to data from CoinDesk.
Here are six stocks on the move Friday:
Chevron (CVX) gained 0.9% after the company reported a profit of $2.96 a share, beating estimates of $2.21 a share, on sales of $44.7 billion, above expectations for $40.5 billion.
Starbucks (SBUX) stock dropped 7.7% after the company reported a profit of $1, beating estimates of 99 cents, on sales of $8.1 billion, below expectations for $8.2 billion.
Newell Brands (NWL) stock rose 0.6% after the company reported a profit of 54 cents a share, beating estimates of 50 cents a share, on sales of $2.79 billion, above expectations for $2.78 billion.
Caterpillar (CAT) stock rose 1% after getting upgraded to Buy from Neutral at UBS.
Synchrony Financial (SYF) stock rose 0.6% after getting upgraded to Buy from Neutral at Citigroup.
U.S. Steel (X) soared 12% following third-quarter earnings Thursday that smashed expectations and an announcement that the company would raise its dividend.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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