S&P 500, Dow slide as pandemic nerves offset tech euphoria
S&P 500, Dow slide as pandemic nerves offset tech euphoria
The S&P 500 and Dow gave up early gains on Friday as concerns about the economic damage from the COVID19 pandemic replaced early euphoria from stunning quarterly earnings reports by Apple, Amazon.com and Facebook.

The S&P 500 and Dow gave up early gains on Friday as concerns about the economic damage from the COVID-19 pandemic replaced early euphoria from stunning quarterly earnings reports by Apple, Amazon.com and Facebook.

Apple Inc surged 6.4% as it delivered year-on-year revenue gains across every category and in every geography.

Amazon.com Inc jumped 4.4% after posting the biggest profit in its 26-year history, while Facebook Inc gained 7.7% it reported better-than-expected revenue.

Google-parent Alphabet Inc , on the other hand, fell 4.2% as quarterly sales dipped for the first time in its 16 years as a public company.

Investors betting on more U.S. government stimulus, before an extra $600-per-week federal jobless benefit expires on Friday, have also been disappointed as the Senate adjourned for the weekend and will return on Monday.

“There is a bit of a balancing act between the positives and negatives, a deluge of pretty strong tech earnings and then the struggle in Congress to try to get the COVID-19 stimulus package passed,” said Dan Eye, head of asset allocation and equity research at Fort Pitt Capital Group in Harrisburg, Pennsylvania.

A surge in the stock price of the tech titans, which make up nearly a fifth of the S&P 500’s value, as well as aggressive fiscal and monetary stimulus have sent the tech-heavy Nasdaq to record highs and set the S&P 500 on course for its fourth straight monthly gain.

The benchmark index is now about 4% shy of its February all-time high, but faltering macroeconomic data and rising COVID-19 cases are making investors cautious again.

Figures on Thursday confirmed the sharpest contraction in U.S. GDP since the Great Depression, while rising jobless weekly claims suggested a nascent recovery in the labor market was stalling.

“We’ve already seen a lot of positives play out and that’s reflected in the pricing (but) we don’t think the market has priced in a cushion for unexpected events on the downside,” Eye said.

At 10:01 a.m. ET, the S&P 500 was up 4.72 points, or 0.15%, at 3,250.94, and the Nasdaq Composite was up 91.00 points, or 0.86%, at 10,678.81. The Dow Jones Industrial Average was down 32.94 points, or 0.13%, at 26,280.71.

The second-quarter earning season is past the halfway mark with about 82.4% of companies that have reported beating significantly lowered estimates, according to Refinitiv IBES data.

Energy stocks fell the most among the 11 major S&P sectors after Chevron Corp reported an $8.3 billion loss on asset writedowns and ExxonMobil Corp recorded a second consecutive quarterly loss.

Caterpillar Inc reversed premarket gains and fell 3.2% after the heavy equipment maker signaled more pain from an uncertain economic outlook.

Declining issues outnumbered advancers 1.52-to-1 on the NYSE and 1.56-to-1 on the Nasdaq.

The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 79 new highs and six new lows.

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