While you were sleeping: Facebook, AMD lift Wall St

While you were sleeping: Facebook, AMD lift Wall St

By Margreet Dietz

April 27 (BusinessDesk) - Wall Street climbed, bolstered by better-than-expected earnings including from Facebook and Advanced Micro Devices, while US Treasuries retreated for the first time in more than a week.

Shares of Facebook jumped, up 9.8 percent as of 2.55pm in New York, after the company posted quarterly results that blew past expectations and eased concern about the impact from the Cambridge Analytica data scandal.

"Strong first-quarter shows how Facebook's industry-leading return on investment and innovation are driving outsized advertising/free cash flow growth," Morgan Stanley analysts said in a note, according to CNBC.

"Heavy 2018 investment (operating expenditure/capital expenditure) is a positive, as it plants seeds for even longer growth," Morgan Stanley noted. "We think Facebook's increasingly utility-like status will offset any material General Data Protection Regulation impact. Remain overweight.”

Advanced Micro Devices was another tech stock that reported quarterly results that bettered analysts' estimates. IT traded 13.6 percent stronger as of 3.01pm.

Amazon is scheduled to report its latest results after the market close.

In 2.58pm trading in New York, the Dow Jones Industrial Average climbed 1.2 percent, while the Nasdaq Composite Index rallied 1.9 percent. In 2.43pm trading, the Standard & Poor’s 500 Index gained 1.3 percent.

The Dow gained, led by advances in shares of Visa and those of Home Depot, recently up 4.8 percent and 4.6 percent respectively. Only three Dow stocks declined in late afternoon trading, with shares of Walt Disney recently down 1 percent, those of 3M recently 0.3 percent weaker and those of Verizon slipping 0.2 percent.

So far this earnings season, the worst performing stocks have experienced some of the biggest gains after reporting results, according to Chris Harvey, head of equity strategy at Wells Fargo Securities, Bloomberg reported.

“The takeaway for these underperforming stocks is bad news (a Miss) is, on average, already priced into the stock and good news (a Beat) is rewarded,” Harvey wrote in a note to clients Wednesday, according to Bloomberg.

Meanwhile, US Treasuries fell, sending the yield on the 10-year note three basis points lower to 2.99 percent, after breaching 3 percent for the first time since 2014 on Tuesday. It was the first decline in more than a week, according to Bloomberg.

“The rising yields are having an impact and there are some concerns that we’re in an environment where we’re seeing a peak in terms of earnings growth,” Emily Roland, head of capital markets research at John Hancock Investments in Boston, told Reuters.

“But some of these factors are overshadowing the fact we have sturdy fundamental backdrop, both earnings and economic,” Roland noted.

In Europe, the Stoxx 600 Index finished the session with a 0.9 percent gain from the previous close. Germany’s DAX Index rose 0.6 percent, the UK’s FTSE 100 Index also added 0.6 percent, while France’s CAC40 Index climbed 0.7 percent.

(BusinessDesk)

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