Wall Street closes higher as large-cap tech companies rise

Wall Street closes higher as large-cap tech companies rise

The S&P 500 gained 51.54 points, or 1.02%, to 5,099.96, the Nasdaq Composite gained 316.14 points, or 2.03%, to 15,927.90, and the Dow Jones Industrial Average increased by 153.86 points, or 0.40%, to 38,239.66.

Since early November 2023, the S&P 500 and the Nasdaq have had their largest weekly percentage increases.

The strong performance of megacap growth firms after strong quarterly results from Microsoft and Alphabet, two titans of the technology industry, as well as statistics on modest inflation, helped US markets end higher on Friday.

Alphabet's $70 billion stock buyback program, first-ever dividend, and better-than-expected first-quarter earnings delighted investors. With a 10% increase in shares, it achieved a new high, increasing the market value of the Google parent company to almost $2 trillion.

Microsoft's third-quarter sales and earnings topped Wall Street projections, resulting in benefits from the use of artificial intelligence (AI) across its cloud services, which lifted the company's shares by 1.8%.

Additional megacap growth companies that finished higher were Meta Platforms (+0.4%), Nvidia (+5.8%), and Amazon.com (3.4%). But Apple dropped 0.3%, while Tesla ended the day down 1.1%. Even though the business increased its investment in AI, Meta's earnings on Wednesday disappointed investors.

Leading the gains were communication services, technology, consumer discretionary, and materials, accounting for six of the eleven main S&P 500 sectors that ended the year higher.

Since early November 2023, the S&P 500 and the Nasdaq have had their largest weekly percentage increases. The benchmark S&P 500 stopped three weeks of losses, while the Nasdaq reversed four weeks of losses in a row.

Tom Plumb, president including lead portfolio manager of Plumb Funds in Madison, Wisconsin, said, "The financial reports of Microsoft and Google answered a lot of the concerns about the fact that the expenditures on data centers and AI, which Meta had raised a day before, was going to compress margins."

"With their present capital plans, Google and Microsoft had both said that they still anticipated growing their margins. That dispelled a lot of people's concerns about the expansion of data computing," Plumb said.

According to figures from the U.S. Commerce Department, monthly inflation increased somewhat in March both annually and monthly, falling within expectations for the former.

The news came a day after figures revealed that inflation spiked higher and economic growth slowed in the first quarter, allaying fears of stagflation and providing some respite to financial markets.

Money markets increased the likelihood of a September rate drop by the Federal Reserve after the release of the data. Following the release of the data, the yield on the benchmark 10-year Treasury note decreased, closing at 4.6630%.

The S&P 500 gained 51.54 points, or 1.02%, to 5,099.96, the Nasdaq Composite gained 316.14 points, or 2.03%, to 15,927.90, as well as the Dow Jones Industrial Average increased by 153.86 points, or 0.40%, to 38,239.66.

Snap's stock shot up about 28% after the social media company exceeded first-quarter revenue and user growth projections. Pinterest (PINS.N), which launched a new tab, had a 4% increase in shares.

Exxon Mobil lost about 3% of its market share as its first-quarter earnings dropped 28% from a year earlier, below analyst projections.

After the chipmaker's projection for second-quarter sales and earnings fell short of expectations, Intel saw a 9.1% decline. The market for Intel's conventional data center and PC CPUs is not very strong.

On the NYSE, advances outweighed decliners by a ratio of 2.25 to 1. On the Nasdaq, advances outpaced decliners 1.84 to 1, with 2,685 companies rising and 1,460 falling.

While the Nasdaq registered 59 new highs and 88 new lows, the S&P 500 recorded 21 new 52-week highs as well as eight new lows.

The volume of shares traded on U.S. exchanges was 9.88 billion, lower below the average of 11.01 billion for the previous 20 days.