May 29, 2023

DS Duke

Global Business In World

Stocks Fall Despite Amazon’s Blowout Earnings

3 min read
The major averages slipped on Friday as investors pored over a flurry of earnings results...

The major averages slipped on Friday as investors pored over a flurry of earnings results and a robust profit beat from e-commerce giant Amazon.

The Dow Jones Industrials tumbled 221.9 points to pause for lunch at 33,838.46.

The S&P 500 lost 24.47 points from Thursday’s all-time high at 4,187.

The NASDAQ Composite dropped 60.7 points to 14,021.84.

Amazon, the last of Wall Street’s mega-cap tech companies to publish results, reported a record first-quarter profit. The Seattle-based firm said profits more than tripled to $8.1 billion and January-to-March sales soared 44{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} to $108 billion.

The results blew past Wall Street’s expectations with the company earning $15.79 per share vs. the consensus estimate of $9.54.

Amazon’s results showed demand remained strong for its massive online retail business even as the economy started to open up some.

Shares rose 1{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d}, but that was not enough to lift sentiment for the whole market.

Twitter, meanwhile, moved in the opposite direction on user growth results and second-quarter revenue guidance that fell short of analysts’ forecasts. The social media platform said monetizable daily active users totaled 199 million during the three months ended March 31 and reported per-share earnings of 16 cents. Twitter plunged 14{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d}.

Apple was coming under some slight pressure in the premarket after the European Union said the company’s App Store was breaching its competition rules. The shares were down 0.7{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d}.

Exxon Mobil and Chevron were both trading lower. Chevron shares fell after quarterly EPS failed to exceed expectations.

On the economic calendar, March spending jumped a better-than-expected 4.2{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d}. Personal incomes surged by a massive 21.1{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} amid more fiscal stimulus.

The PCE price index for March increased 0.5{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} month-over-month and 2.3{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} on a year-over-year basis. The core PCE, excluding food and energy, rose 0.4{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} for March and 1.8{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d} year-over-year. The PCE inflation metric is watched closely by the Federal Reserve and Chairman Jerome Powell warned earlier in the week it may show a transitory increase in prices.

The inflation numbers apparently weren’t as high as feared, as the 10-year yield remained flat after the numbers were released.

Prices for 10-Year Treasurys were unchanged, keeping yields at Thursday’s 1.63{e5fab30bc1af2ab9862fe5c16f5be581fd243b6ad78468b48e940aadfb2b849d}.

Oil prices faded $1.50 to $63.51 U.S. a barrel.

Gold prices settled $1.40 to $1,766.90 U.S. an ounce.

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