Apple’s dismal earnings juxtaposed against a marginally better-than-expected GDP rate left the benchmarks struggling for definite direction on Friday. Meanwhile, consumer sentiment touched its highest level in five years. The financial sector was the major loser among the S&P 500 industry groups for the day.
The Dow Jones Industrial Average (:DJI) rose 0.03% to close the day at 13,107.21. The Standard & Poor 500 (S&P 500) slipped 0.1% to finish Friday’s trading session at 1,411.94. The tech-laden Nasdaq Composite Index edged up 0.1% to end at 2,987.95. The fear-gauge CBOE Volatility Index (:VIX) dropped 1.7% to settle at 17.81. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.02 billion shares, lower than the year-to-date average of 6.51 billion shares. Declining stocks outpaced the advancers on the NYSE; as for 56% stocks that declined, 39% stocks moved higher.
For the week, the Dow fell 1.8%, the S&P 500 lost 1.5% and the Nasdaq slumped 0.6% following dismal earnings from blue-chips companies and a cautious outlook from heavyweights like Caterpillar Inc. (NYSE:CAT), 3M Co (NYSE:MMM), E I Du Pont De Nemours And Co (NYSE:DD) and Intel Corporation (NASDAQ:INTC). A decline in revenues, especially from large multinationals, remained the major concern for investors. According to Thomson Reuters, only 36.9% of S&P 500 companies have reported revenue above analysts’ forecasts. Investors also remained apprehensive ahead of the U.S. presidential election.
The big news for the day was the increase in real gross domestic product. Real gross domestic product is the output of goods and services produced by labor and property located in the United States. According to the report, the real gross domestic product expanded 2.0% annually in the third-quarter. This was above consensus estimates of 1.8%. In the second-quarter, real GDP had increased 1.3%. However, some market experts opined that the slightly better-than-expected GDP figure in the third-quarter is still not good enough to reduce unemployment.
Meanwhile, technology bellwether Apple Inc’s (NASDAQ:AAPL) quarterly report disappointed investors. The company reported a second straight quarter of earnings miss. Apple’s earnings were hurt by lower-than-expected iPad sales. Also, Amazon.com, Inc. (NASDAQ:AMZN) posted quarterly results, which came in below analysts’ estimates. The company reported a first quarterly net loss in more than five years.
However, the Technology SPDR (XLK) gained 0.2% following better-than-expected results from Expedia Inc (NASDAQ:EXPE) and analysts’ forecasts that Amazon will do well in the coming holiday shopping season. Stocks such as Expedia, Intel Corporation, MIPS Technologies, Inc. (NASDAQ:MIPS), Texas Instruments Incorporated (NASDAQ:TXN) and Atmel Corporation (NASDAQ:ATML) surged 15.0%, 1.2%, 1.1%, 2.8% and 1.3, respectively.
Separately, Thomson Reuters/University of Michigan released data on the consumer sentiment index, which revealed that the consumer sentiment rose to 82.6 in October from 78.3 in September. The consumer sentiment index reached its highest level since September 2007. This was just above consensus estimates of 82.5. According to market experts, the increase in consumer sentiment was boosted by a decrease in gasoline prices, improving property values and a gradual improvement in labor markets.
The Financial Select Sector SPDR lost 0.5% and was the major loser among the S&P 500 group of companies. Stocks such as Citigroup Inc. (NYSE:C), Morgan Stanley (NYSE:MS), JPMorgan Chase & Co. (NYSE:JPM), Goldman Sachs Group, Inc. (NYSE:GS) and UBS AG (NYSE:UBS) lost 2.7%, 0.4%, 1.2%, 0.2% and 0.4%, respectively.
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