The Dow Jones Industrial Average is pulling back off highs but remains positive after a strong open for the indexes on Friday. Stocks are on track to close out their best month since November 2020. Strong earnings from tech leaders Apple and Amazon.com late Thursday boosted the Nasdaq composite as the index led.
Stocks Reporting Earnings: Apple, Amazon Pop
Apple reported record quarterly revenue of $83 billion, up 2% year over year and the numbers exceeded Wall Street's expectations.
Earnings of $1.20 a share also beat expectations but still showed a year-over-year decline of 8%. The iPhone maker did not offer future guidance. Apple popped 3% and retook its 200-day moving average.
Meanwhile, Amazon stock popped over 11% in strong volume as shares make their way toward the 200-day moving average. The firm reported a loss of 20 cents a share on revenue of $121.23 billion, beating expectations. Revenue from Amazon Web Services also beat expectations with sales of $19.7 billion while advertising revenue of $8.76 billion also exceeded views.
Dow Jones Oil Giant Chevron, Exxon Report Earnings
Oil giants Chevron and Exxon Mobil also reported strong earnings early Friday. Both firms posted record profits in Q2.
Exxon Mobil earnings soared 276% to $4.14 per share. Sales spiked 70% to $115.7 billion. Shares gapped up 4.3% in heavy volume as the stock rose toward the 105.67 buy point of a cup-shaped base. Tight supply and high demand for oil, natural gas and refined products drove the increase in performance, the company said.
Dow Jones component Chevron gapped up and rose 8.5% as the stock reclaimed its 50-day moving average, a bullish sign. Chevron's earnings per share catapulted 240% to $5.82. Revenue spiked 83% to $68.7 billion in the second quarter.
"Second quarter financial performance improved as we delivered a return on capital employed of 26%," CEO Mike Wirth said in a press release. "We more than doubled investment compared to last year to grow both traditional and new energy business lines."
Dow Jones Rises, Nasdaq Leads Upside
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32675.13 | +145.50 | +0.45 |
| S&P 500 | (0S&P5) | 4105.80 | +33.37 | +0.82 |
| Nasdaq | (0NDQC ) | 12281.59 | +119.00 | +0.98 |
| Russell 2000 | 186.28 | +0.35 | +0.19 | |
| IBD 50 | 28.12 | -0.07 | -0.25 | |
Last Update: 11:50 AM ET 7/29/2022 |
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In early trading, the Dow Jones average was up 0.4% after opening slightly lower. The S&P 500 rose 0.8% while the Nasdaq was up 1%. Small caps lagged, with the Russel 2000 up 0.2%. Volume was running lower on the Nasdaq and on the NYSE vs. the same time on Thursday.
The S&P 500 is on track to post gains upward of 7.5% for the month of July, its best month since November of 2020. Meanwhile, the Nasdaq is on track for gains of roughly 10% while the Dow Jones is up over 5% for the month.
Consumer discretionary and energy stocks led the upside among the S&P 500 sectors, while consumer staples stocks lagged.
U.S. Personal Spending, Income, Prices Data
Despite rising inflation, economic data showed early Friday that American households managed to spend slightly more money in the month of June as personal spending rose 0.1%. This was up from May's 0.3% decline. Meanwhile, personal income rose 0.6% for a second month in a row, and 5.7% on a year-over-year basis. But real disposable income fell 0.3% month over month, and was down 3.2% year over year.
"The tug of war on consumer purse strings is slowly being won by the bad guys: high inflation, rising borrowing costs, and dismal confidence," said Sal Guatieri, senior economist at BMO Capital Markets. "While elevated savings and higher wages are putting up a good fight, this battle will likely come down to whether companies slash their workforce."
The personal consumer expenditures (PCE) index climbed 1% in June from the previous month and 6.8% from the year-ago period, both slightly above forecasts. Core prices also came in slightly above estimates.
"Core PCE's acceleration in June, as well as the higher-than-expected increase in the Employment Cost Index, will keep the Fed squarely focused on inflation, not recession fears," noted Bill Adams, Chief Economist for Comerica Bank. "But continued high increases of core PCE inflation, means the Fed is more likely to keep interest rates in a modestly restrictive stance throughout 2023, even if growth weakens or the labor market softens."
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
