Meta Platforms soared on a welcomed earnings report, helping the stock market bounce Thursday morning. While earnings buoyed stocks, the U.S. economy shrank in the first quarter.
The Nasdaq was up 0.5% and the S&P 500 gained 0.2% as indexes pared opening gains.
The first half-hour of trading was eerily reminiscent of Wednesday's session, when the stock market initially jumped on earnings reports but faded into the close. It's a sign of a weak stock market when buyers refuse to stick around for the final hours of trading. So watch how the market trades the rest of the day.
The Dow Jones Industrial Average was flat as results for McDonald's, Merck and Caterpillar left those Dow stocks mixed.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33367.10 | +65.17 | +0.20 |
| S&P 500 | (0S&P5) | 4202.97 | +19.01 | +0.45 |
| Nasdaq | (0NDQC ) | 12545.79 | +56.86 | +0.46 |
| Russell 2000 | 186.26 | -0.70 | -0.37 | |
| IBD 50 | 32.71 | -0.34 | -1.03 | |
Last Update: 10:06 AM ET 4/28/2022 |
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McDonald's beat sales and profit expectations as same-store sales jumped 11.8%. Shares rose 1.6%. Caterpillar stock fell 5% despite that the heavy machinery maker defied estimates and posted a small profit increase.
Merck shares rose 4% following estimate-beating Q1 results. Merck's Covid treatment accounted for $3.2 billion in sales. The stock is getting closer to the 89.58 buy point of a cup with handle.
Apple Reports After The Stock Market Close
Apple, the largest Dow company by market cap, and Intel report results after today's close. Apple climbed 2% to regain the 200-day moving average. Intel rose 1.3%.
Volume rose on the NYSE and Nasdaq compared with the same time on Wednesday.
Meta Platforms, the parent of Facebook, gave the Nasdaq and S&P 500 a boost with a 16% surge at the open. The company' first-quarter revenue and sales forecast for Q2 missed views. But earnings topped expectations and user numbers increased.
In other key earnings report, Northrop Grumman reversed higher and is nearing the 477.36 buy point of a cup-with-handle base. The defense systems and aircraft maker announced mixed first-quarter results.
Qualcomm jumped more than 5% after the maker of chips for wireless devices late Wednesday beat quarterly expectations and guided higher for the current period.
IBD 50 Lags Stock Market Indexes
Innovator IBD 50 ETF fell 1%, lagging well behind the stock market.
O'Reilly Automotive led the IBD 50's losses as the auto parts chain missed first-quarter earnings expectations, sending its stock down nearly 11% in heavy volume. O'Reilly gapped below the 50-day and 200-day moving averages. It is on pace for its worst decline since March 16, 2020, when it slid 15.4%, according to Dow Jones Market Data.
Novo Nordisk gapped below the 50-day moving average in heavy volume. Eli Lilly reported that late-stage trials for its tirzepatide drug caused overweight patients lose more than 20% of their weight. Shares of Eli Lilly gained nearly 3%. Novo Nordisk has a rival weight-loss drug.
Reliance Steel led the IBD 50 with a 3.7% increase as the stock finds support at the 10-week moving average.
GDP Falls In First Quarter
The U.S. Commerce Department said gross domestic product fell 1.4% in the first quarter, the first contraction in the U.S. economy since the Q1-Q2 2020 declines during the worst of the pandemic. It also marked a sharp slowdown from the previous quarter's 6.9% burst. Economists had expected a 1.1% increase, according to Econoday.
The largest drag on the economy was the large trade deficit, which hurt headline growth by over 3 percentage points, Jeffrey Roach, chief economist for LPL Financial, said in a commentary. Underlying demand from both consumers and businesses was strong.
"Firms spent real money on capex (think computers, machinery, etc.) and capex grew annualized 15%. This provides momentum for the rest of the year," Roach added.
Claims for jobless benefits fell to 180,000 from 185,000 the previous week, basically in line with forecasts.
