By Yashaswini Swamynathan
Wall Street rose on Friday as robust economic data shone light on the strength of the U.S. economy, while upbeat results from Alphabet and Chevron offset the decline in health stocks and Amazon.The U.S. Commerce Department's first estimate on gross domestic product showed the U.S. economy grew at its fastest pace in two years. GDP increased at a 2.9 percent annual rate in the third quarter, helped by a surge in exports.While the report supports the case for an interest rate hike, the Federal Reserve is unlikely to make a move at its meeting next week, as it falls just days ahead of the U.S. presidential election. However, the odds of a rate increase in December stand at 74.2 percent, according to the CME Group's FedWatch tool. The main focus of the market remains on corporate results as investors hope the latest quarter snaps a year-long earnings recession. Nearly 73 percent of the S&P 500 companies that have reported, have issued profits above Wall Street expectations, setting the stage for the benchmark index to post an overall earnings growth of 3.0 percent for the third quarter, according to Thomson Reuters I/B/E/S.
Alphabet's 2.1 percent rise and Chevron's 4.6 percent jump on upbeat earnings buoyed sentiment. The stocks gave the biggest boost to the S&P 500. On the flip side, Amazon.com was set for its worst day in nearly nine months, falling 4 percent to $785.53 after the online retailer warned that heavy investments in the crucial holiday quarter would hurt profits. The stock was the top drag on the S&P and the Nasdaq."(Today's movement) is a tug-of-war among many things," said Brad McMillan, chief investment officer at Commonwealth Financial Network. "It's the certainty that earnings are improving versus the ongoing uncertainty from the election and the Fed." At 12:30 a.m. ET (1630 GMT), the Dow Jones Industrial Average was up 79 points, or 0.43 percent, at 18,248.68.
The S&P 500 was up 6.93 points, or 0.32 percent, at 2,139.97 and the Nasdaq Composite was up 12.84 points, or 0.25 percent, at 5,228.81.The Dow is the only index to likely end the week on a positive note. Ten of the 11 major S&P sectors were higher, while the healthcare sector lost 2.02 percent - set for its worst month since January.
Amgen plunged 10.4 percent to $144.17 after the world's largest biotechnology company reported sales for its flagship drug that disappointed investors and analysts. Mastercard touched a record high of $107.65 after the payments processor reported a 21.2 percent jump in quarterly profit. The results also lifted shares of larger rival Visa.Advancing issues outnumbered decliners on the NYSE by 1,643 to 1,200. On the Nasdaq, 1,509 issues rose and 1,151 fell.The S&P 500 index showed nine new 52-week highs and nine new lows, while the Nasdaq recorded 39 new highs and 102 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva and Don Sebastian)
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Published Date: Oct 28, 2016 23:30 PM | Updated Date: Oct 28, 2016 23:30 PM