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Markets finished sharply higher on Friday boosted by a broader tech rally. The rally was lead by Apple after Warren Buffett’s Berkshire Hathaway announced that it has increased its stake in the iPhone maker. Moreover, weaker-than-expected U.S. wage growth also somewhat eased fears inflationary fears. These positives overshadowed the uncertainty over U.S.-China trade talks. This saw all three major indexes ended the day in positive territory on Friday.
The Dow Jones Industrial Average (DJI) gained 1.4%, to close at 24,262.51. The S&P 500 gained 1.3% to close at 2,663.42. The Nasdaq Composite Index closed at 7,209.62, increasing 1.7%. A total of 6.37 billion shares were traded on Friday, lower than the last 20-session average of 6.57 billion shares. Advancers outnumbered decliners on the NYSE by a 3.22-to-1 ratio. On Nasdaq, a 3.10-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The Dow gained 332.36 points as shares of Apple (AAPL - Free Report) rallied after investor Warren Buffett disclosed that his company Berkshire Hathaway bought a large number of shares of the iPhone marker in recent months. Shares of other tech giants Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) and Facebook too gained on this news. Amazon has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 gained 33.69 points, with all 11 major sectors ending in positive territory. The Technology Select Sector SPDR (XLK) gained 2%. Meanwhile, the tech-heavy Nasdaq gained 121.47 points.
Apple Helps Tech Stocks Rally
Tech stocks rallied on Friday, led by Apple, after market guru Warren Buffett’s Berkshire Hathaway announced that it has bought 75 million of shares of the iPhone maker in the first quarter. This saw shares of Apple rally 3.9%. Apple’s shares had taken a hit a couple of weeks ago after Morgan Stanley predicted that sales of iPhone in the June quarter will be low. However, Friday saw Apple register its highest weekly gain since October 2011.
Apple’s rally gave a boost to the broader technology sectors. Shares of Alphabet gained 2.4%, while Amazon and Facebook increased 0.6% and 1.5%, respectively.
Lower-Than-Expected Wage & Job Growth
The Department of Labor announced that wage growth increased lower than expected in April. Average hourly wages increased a meager 0.15% against expectations of 0.2%. This somewhat eased inflationary fears fueled by concerns of rising rates. Hourly earnings have been rising at the pace of 2.7%. This is above the recovery pace but still below Fed’s target.
Moreover, job additions also came in lower than expected. U.S. added 164,000 jobs in April against expectations of 195,000. However, unemployment rate dropped to 3.9%, hitting a near 18-year low. That said, the low unemployment rate, which indicates at inflationary pressure on wages, was countered by the lower-than-expected rise in payroll. This gave investors’ confidence a boost, thus helping the market rally.
U.S-China Trade War Fears
The two-day U.S.-China trade negotiations concluded on Friday but no deal could be reached. The United States continued to press its demands for China to reduce the trade gap by $200 billion over the next two years. This created initial fears of a trade war that saw the market opening low on Friday.
Weekly Roundup
It was a mixed week for all the three major indexes. Market declined on the first two days of the week after healthcare and industrial stocks took a hit, followed by poor economic data. According to the Institute for Supply Management (ISM), U.S. manufacturing index declined to 57.3 in April from 59.3 in March. The reading was also below the consensus estimate of 58.4.
The middle of the week started on a high after Fed announced that it will keep its monetary policy unchanged. However, as fears of U.S.-China trade war escalated once again, markets took a hit. Even Apple’s robust earnings results failed to cheer up markets, as inflationary fears once again gripped markets, resulting in panic selling in the late hours on Wednesday.
However, markets finally bounced back on Friday with tech stocks rallying, led by Apple, which somewhat erased inflationary and trade war fears.
Starbucks Corporation (SBUX - Free Report) and Swiss-based food giant Nestle SA are joining forces to revitalize their coffee domains. (Read More)
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Stock Market News For May 7, 2018
Markets finished sharply higher on Friday boosted by a broader tech rally. The rally was lead by Apple after Warren Buffett’s Berkshire Hathaway announced that it has increased its stake in the iPhone maker. Moreover, weaker-than-expected U.S. wage growth also somewhat eased fears inflationary fears. These positives overshadowed the uncertainty over U.S.-China trade talks. This saw all three major indexes ended the day in positive territory on Friday.
The Dow Jones Industrial Average (DJI) gained 1.4%, to close at 24,262.51. The S&P 500 gained 1.3% to close at 2,663.42. The Nasdaq Composite Index closed at 7,209.62, increasing 1.7%. A total of 6.37 billion shares were traded on Friday, lower than the last 20-session average of 6.57 billion shares. Advancers outnumbered decliners on the NYSE by a 3.22-to-1 ratio. On Nasdaq, a 3.10-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The Dow gained 332.36 points as shares of Apple (AAPL - Free Report) rallied after investor Warren Buffett disclosed that his company Berkshire Hathaway bought a large number of shares of the iPhone marker in recent months. Shares of other tech giants Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) and Facebook too gained on this news. Amazon has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 gained 33.69 points, with all 11 major sectors ending in positive territory. The Technology Select Sector SPDR (XLK) gained 2%. Meanwhile, the tech-heavy Nasdaq gained 121.47 points.
Apple Helps Tech Stocks Rally
Tech stocks rallied on Friday, led by Apple, after market guru Warren Buffett’s Berkshire Hathaway announced that it has bought 75 million of shares of the iPhone maker in the first quarter. This saw shares of Apple rally 3.9%. Apple’s shares had taken a hit a couple of weeks ago after Morgan Stanley predicted that sales of iPhone in the June quarter will be low. However, Friday saw Apple register its highest weekly gain since October 2011.
Apple’s rally gave a boost to the broader technology sectors. Shares of Alphabet gained 2.4%, while Amazon and Facebook increased 0.6% and 1.5%, respectively.
Lower-Than-Expected Wage & Job Growth
The Department of Labor announced that wage growth increased lower than expected in April. Average hourly wages increased a meager 0.15% against expectations of 0.2%. This somewhat eased inflationary fears fueled by concerns of rising rates. Hourly earnings have been rising at the pace of 2.7%. This is above the recovery pace but still below Fed’s target.
Moreover, job additions also came in lower than expected. U.S. added 164,000 jobs in April against expectations of 195,000. However, unemployment rate dropped to 3.9%, hitting a near 18-year low. That said, the low unemployment rate, which indicates at inflationary pressure on wages, was countered by the lower-than-expected rise in payroll. This gave investors’ confidence a boost, thus helping the market rally.
U.S-China Trade War Fears
The two-day U.S.-China trade negotiations concluded on Friday but no deal could be reached. The United States continued to press its demands for China to reduce the trade gap by $200 billion over the next two years. This created initial fears of a trade war that saw the market opening low on Friday.
Weekly Roundup
It was a mixed week for all the three major indexes. Market declined on the first two days of the week after healthcare and industrial stocks took a hit, followed by poor economic data. According to the Institute for Supply Management (ISM), U.S. manufacturing index declined to 57.3 in April from 59.3 in March. The reading was also below the consensus estimate of 58.4.
The middle of the week started on a high after Fed announced that it will keep its monetary policy unchanged. However, as fears of U.S.-China trade war escalated once again, markets took a hit. Even Apple’s robust earnings results failed to cheer up markets, as inflationary fears once again gripped markets, resulting in panic selling in the late hours on Wednesday.
However, markets finally bounced back on Friday with tech stocks rallying, led by Apple, which somewhat erased inflationary and trade war fears.
Stocks That Made Headlines
Starbucks to Receive $7.15B From Nestle in Coffee Alliance
Starbucks Corporation (SBUX - Free Report) and Swiss-based food giant Nestle SA are joining forces to revitalize their coffee domains. (Read More)
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>