The stock market fell sharply after earnings reports from Amazon.com and Apple painted a negative view of supply chains. But personal spending jumped.
The S&P 500 dropped 1.2% in early trading. The Nasdaq composite fell 1.1% and the Dow Jones Industrial Average dropped 0.9%.
Volume was lower on both the Nasdaq and the NYSE as compared to the same time on Thursday.
Personal spending jumped 1.1% in March, led by spending on services. Even after inflation, real spending increased by 0.2%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33617.26 | -299.13 | -0.88 |
| S&P 500 | (0S&P5) | 4234.25 | -53.25 | -1.24 |
| Nasdaq | (0NDQC ) | 12727.20 | -144.33 | -1.12 |
| Russell 2000 | 189.88 | -0.57 | -0.30 | |
| IBD 50 | 33.39 | -0.01 | -0.03 | |
Last Update: 10:26 AM ET 4/29/2022 |
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"Don't count the American consumer out yet — interest rates aren't high enough and income and balance sheets are pretty sturdy," said Sal Guatieri, senior economist at BMO Capital Markets.
However, personal income came in at a paltry 0.5% rise in March as wage growth was not fast enough to keep up with inflation.
Amazon Stock Falls Sharply; Apple Trims Losses
Consumer electronics giant Apple late Thursday easily beat Wall Street's targets for its fiscal second quarter thanks to robust services business. After opening lower, Apple stock was down 0.2%.
The Cupertino, Calif.-based company earned $1.52 a share on sales of $97.28 billion in the quarter ended March 26. Analysts polled by FactSet expected Apple to earn $1.42 a share on sales of $94 billion. On a year-over-year basis, Apple sales and earnings both increased 9%.
Apple also raised its quarterly dividend 5% to 23 cents a share. Plus, it announced a $90 billion increase to its share repurchase program.
AAPL shares have a 179.71 buy point from a handle that's very deep. Arguably, there's an early entry from a short trendline.
Amazon fell a sharp 11% after late Thursday it recorded a steep first-quarter loss, made worse by a revenue forecast that was short of expectations. Amazon stock plunged, as the company blamed the pandemic and Russia's invasion of Ukraine for its outlook. The online retail giant is on pace for the largest percent decrease since Oct. 26, 2011, when it fell 12.7%.
For its second quarter ending in June, Amazon expects revenue in the range of $116 billion to $121 billion. The midrange of $118.5 billion is below analyst estimates of $125.3 billion.
Amazon reported an adjusted loss of $7.56 a share on revenue of $116.4 billion. Analysts were expecting Amazon to report earnings of $8.35 a share on revenue of $116.5 billion, according to FactSet, but that apparently didn't include the pretax loss of $7.6 billion from its investment in electric-vehicle maker Rivian Automotive.
However, if the $7.6 billion loss from that investment was not included, Amazon net income would have been about $4 billion, while analysts were expecting $4.47 billion. Amazon shares are trading near the bottom of a long consolidation and are well below their 50-day and 200-day moving averages.
Market Correction Intensifies; What To Do Now
Oil Companies Report Mixed Earnings
Exxon Mobil and Chevron reported mixed first-quarter earnings Friday. Exxon fell 0.2% and Chevron dropped 1.5%. Crude oil prices shot up again on Friday to $106 per barrel, in spite of weaker oil demand from China due to the Covid lockdown there.
Exxon earnings jumped to $2.07 a share. Revenue climbed 53% to $90.5 billion. Analysts polled by FactSet expected Exxon earnings to balloon to $2.23 a share vs. 65 cents a year ago. Revenue was seen rising 40% to $82.838 billion.
Meanwhile, Exxon is forming a cup-with-handle base. The stock has passed both its 50-day and 21-day moving averages as it approaches a buy point of 89.90.
Chevron earnings came in at $3.36 a share. Revenue leapt 70% to $54.37 billion. Analysts expected Chevron earnings to nearly quadruple from a year earlier to $3.41 a share. Revenue was seen jumping to $51.14 billion.
AbbVie stock crumbled 7.5% after the biopharma giant cut its earnings outlook and came up short on sales for its first quarter. The company reported adjusted profit of $3.16 per share on $13.54 billion in sales. On average, analysts polled by FactSet expected AbbVie to earn $3.14 a share on $13.66 billion in sales.
For the year, AbbVie cut its earnings outlook to $13.92-$14.12 per share. Analysts had predicted full-year adjusted profit of $14.16 a share. The stock gapped below the 50-day moving average in heavy volume, causing a sell signal.
Follow Michael Molinski on Twitter @IMmolinski
