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Wall Street ends sharply higher, lifted by Meta and Apple

Stock Markets Apr 28, 2022 06:41PM ET
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© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar//File Photo

By Bansari Mayur Kamdar and Noel Randewich

(Reuters) - Wall Street ended sharply higher on Thursday after a strong quarterly report from Meta Platforms lifted beaten down technology and growth stocks and offset worries about the U.S. economy's contraction in the first quarter.

The Facebook (NASDAQ:FB) parent surged 17.6% after the social network reported a larger-than-expected profit and rebounded from a drop in users.

Communication services and technology were among the strongest of 11 S&P 500 sector indexes, jumping 4.04% and 3.89%, respectively.

Apple Inc (NASDAQ:AAPL), the world's most valuable company, and e-commerce giant Amazon.com Inc (NASDAQ:AMZN) both rallied more than 4% ahead of their quarterly reports later in the day.

In extended trade, Amazon tumbled about 10% after the company forecast current-quarter sales below Wall Street estimates.

Investors have been dumping high growth stocks for weeks, due to worries about inflation, rising interest rates and a potential economic slowdown. Even with Thursday's strong gain, the tech-heavy Nasdaq was down almost 10% in the month of April, on track for its deepest one-month decline since March 2020.

The S&P 500 has gained or lost 2% or more in a day some 32 times so far in 2022, compared to 24 such days in all of 2021.

"When interest rates, the inflation path and what the Fed is going to do are so volatile, it just means that pricing every other asset is that much more difficult," said Zach Hill, head of Portfolio Strategy at Horizon Investments in Charlotte, North Carolina.

"We've done a lot of earnings data over the last couple days and weeks and by and large, outside of a few particular cases, corporate America's underlying fundamentals have been relatively strong," Hill said.

The U.S. economy unexpectedly contracted in the first quarter as COVID-19 cases surged again, and government pandemic relief money dropped.

The first decrease in gross domestic product since the short and sharp pandemic recession nearly two years ago, reported by the Commerce Department, was mostly driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation.

Unofficially, S&P 500 climbed 2.47% to end the session at 4,287.50 points.

The Nasdaq gained 3.06% to 12,871.53 points, while Dow Jones Industrial Average rose 1.85% to 33,916.39 points.

GRAPHIC: S&P 500's busiest trades https://fingfx.thomsonreuters.com/gfx/mkt/zdvxogakjpx/SPX_by_busiest_trades.png

The Ukraine war, China's COVID lockdowns and surging inflation have weighed on the outlook for the global economy, sparking volatility ahead of the Federal Reserve's May meeting next week. Fed watchers expect a 50-basis-point rate hike.

Overall, first-quarter earnings have been better than expected, with 81% of the 237 companies in the S&P 500 that have reported results so far beating Wall Street expectations. Typically, only 66% of companies beat estimates, according to Refinitiv data.

Qualcomm (NASDAQ:QCOM) Inc surged 9.7% after the chipmaker forecast third-quarter revenue above analyst expectations.

The Philadelphia Semiconductor Index surged 5.6% in its biggest one-day gain in over a year.

Caterpillar Inc (NYSE:CAT) fell 0.7% after it warned that profit margins in the current quarter were likely to be pressured from surging costs.

Among other movers, Amgen Inc (NASDAQ:AMGN) fell 4.3% after the drugmaker said the U.S. Internal Revenue Service is seeking additional back taxes of $5.1 billion.

Volume on U.S. exchanges was 12.3 billion shares, compared with an 11.8 billion average over the last 20 trading days.

Across the U.S. stock market, advancing stocks outnumbered declining ones by a 2.6-to-one ratio.

The S&P 500 posted five new 52-week highs and 44 new lows; the Nasdaq Composite recorded 25 new highs and 672 new lows.

Wall Street ends sharply higher, lifted by Meta and Apple
 

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Comments (32)
Stan Smith
Stan Smith Apr 28, 2022 2:59PM ET
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So...even a negative GDP causes stocks to soar. C'mon enough of this farce! its an insult to US financial markets and investors
First Last
First Last Apr 28, 2022 2:59PM ET
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Negative GDP growth was expected
Mitchel Pioneer
Mitchel Pioneer Apr 28, 2022 2:46PM ET
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As predicted yesterday, another major loss miraculously vanishes from the system 2 days after it occurs.  Wall Street laughs in the face of the global investment community, as they maliciously and flagrantly DEFRAUD America in broad daylight.  Will they once again hand place the biggest investment JOKE in the world atop 34K by the close?
First Last
First Last Apr 28, 2022 2:46PM ET
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You predicted nopthing yesterday.  Go on and predict tomorrow.
Justin Justice
Justin Justice Apr 28, 2022 2:43PM ET
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should I buy puts before close
Jamie An
Jamie An Apr 28, 2022 2:41PM ET
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Groundless and very twisted market rally only for the sake of hedge black money
Stan Smith
Stan Smith Apr 28, 2022 2:11PM ET
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Meta now > GDP. Why not just make Meta the GDP. 60% of Small and medium sized businesses which are 'supposed' to make up a big portion the GDP have vanished forever. This is bordering on lunacy!
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Stan Smith
Stan Smith Apr 28, 2022 2:11PM ET
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First Last  Priced in?? Really getting tired of that over-used, meaningless term. If inflation and all the other real macro events were properly priced in, stocks would be around 10K or less . The FED have distorted markets so 'priced in' is a redundant term
First Last
First Last Apr 28, 2022 2:11PM ET
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You can argue it's not completely priced in, but you can't say "Stocks just go up no matter what the news" if stocks have been trending DOWN for months.
Stan Smith
Stan Smith Apr 28, 2022 2:11PM ET
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First Last  Well, I can say that with some conviction:   What I've learned in the past 12 month:  1. The economy and equities can grow forever (a.k.a. infinite growth on a finite planet in a waste-is-growth Landfill Economy) 2. Higher energy costs have near-zero effect on the economy and stocks. 3. The Federal Reserve will deliver a soft landing which reduces inflation back to near-zero while the economy and stocks continue lofting higher. 4. Higher food costs and global food scarcities have near-zero effect on the economy and stocks. 5. Supply chains unraveling has near-zero effect on the economy and stocks. 6. Deglobalization has near-zero effect on the economy and stocks. 7. Higher interest rates have near-zero effect on housing, the economy and stocks. 8. The continual evolution of more contagious variants of Covid-19 has near-zero effect on the economy and stocks. 9. There are no speculative bubbles in housing, stocks or other assets.
First Last
First Last Apr 28, 2022 2:11PM ET
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Stan Smith   You used the phrase "the economy and stocks" multiple times.  The stock market is based on the economy of the rich.
Stan Smith
Stan Smith Apr 28, 2022 2:11PM ET
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First Last  Right... so they should stop using it as an overall indicator of US economic health...it isn't. Which takes me back to my original point...the US GDP is collapsing
Jamie An
Jamie An Apr 28, 2022 1:36PM ET
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Today cheers, Tomorrow it will dig subground
Unoqueva Alguno
Unoqueva Alguno Apr 28, 2022 1:36PM ET
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FB numbers are a joke, who are those new users?!? all fake.
Ahmed Alamery
Ahmed Alamery Apr 28, 2022 1:36PM ET
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i am one person who made 10 accounts 🤣
Dave Jones
Dave Jones Apr 28, 2022 1:34PM ET
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Advertising. The bedrock of the American economy.
Wilks Campbell
Wilks Campbell Apr 28, 2022 1:33PM ET
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we all know it well FB is trash
Alex Malmstrom
Alex Malmstrom Apr 28, 2022 12:54PM ET
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The title of this article sounds like Cathie Wood wrote it lol!
 
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