Traders on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
Stocks jumped Friday as Big Tech names Alphabet and Microsoft rallied on strong earnings and traders pored through fresh U.S. inflation data.
The broad market index advanced 1.1%, while the tech-heavy Nasdaq climbed 2.1%. The Dow Jones Industrial Average rose 110 points, or 0.3%.
Shares of Alphabet jumped more than 10% following better-than-expected first-quarter earnings and headed for their best day since July 2015. The company also authorized its first-ever dividend and a $70 billion buyback. Microsoft added 3% on strong fiscal third-quarter results.
Stocks also appeared to get a boost from March’s core personal consumption expenditures reading. The gauge, excluding food and energy, rose 2.8% from a year ago and came in ahead of the 2.7% expected by Dow Jones. Personal spending rose 0.8% and ahead of a 0.7% estimate.
Those moves are helping Wall Street regain some of its footing after a down day. The blue-chip Dow slid 375 points Thursday after new U.S. economic data showed a sharp slowdown in growth and pointed to persistent inflation. Gross domestic product expanded by 1.6% in the first quarter, compared to a Dow Jones forecast of 2.4%.
“We’re still optimistic on the market, however, as we believe that rate cuts aren’t necessary for the bull market to continue,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “Instead, continued economic expansion and growth in corporate profits – which are already seeing from the largest companies in the market – are what will propel stock prices to new highs.”
The major averages are on track for a winning week. The S&P 500 is up 2.8% week to date, on pace to break a three-week losing streak. The Nasdaq has gained more than 4%, headed for its first positive week in five. The Dow is up by a more modest 0.6% this week.
