MARKET SNAPSHOT: S&P 500 Nasdaq End At Records As Tech Rally Powers Gains

By Barbara Kollmeyer and Anora M. Gaudiano, MarketWatch

Main indexes post weekly gains

The S&P 500 and Nasdaq Composite closed at records on Friday, fueled by large gains in technology shares following better-than-expected quarterly results from heavyweights Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Intel Corp.

Equities were also buoyed by data showing the U.S. economy expanded at a solid 3% annual pace (http://ift.tt/2i7ICbR) for a second straight quarter despite damages from two hurricanes, while the University of Michigan reported consumer sentiment (http://ift.tt/2gGEuio)in October was the strongest it has seen in 13 years.

What did stock-market indexes do?

The S&P 500 gained 20.67 points, or 0.8%, to 2,581.07, with most of the gains coming from the technology sector, which rose 2.9%. The consumer-staples sector, however, sold off, falling 0.9%. The index gained 0.2% over the week, rising for the seventh consecutive week, its longest positive weekly streak since late 2014.

The Dow Jones Industrial Average gains were limited by losses Chevron Corp. (CVX) and Merck & Co.(MRK). The blue-chip index added 33.33 points, or 0.1%, at 23,434.19, on the back of sharp gains in tech components Microsoft Corp. and Intel Corp. The index gained 0.5% over the week, advancing for the seventh straight week. The weekly run is the longest since December.

The Nasdaq Composite Index , meanwhile, advanced 144.49 points, or 2.2%, to 6,701.26, for its best percentage gain since Nov. 7, according to FactSet data. The tech-heavy index rose 1.1% over the week, its fifth consecutive weekly gain.

What is driving the market?

Late Thursday, four of the most valuable tech companies in the world--Amazon (http://ift.tt/2iElupj)(AMZN), Google parent Alphabet (http://ift.tt/2yTxtFr)(GOOGL), Microsoft (http://ift.tt/2zPLZw5)(MSFT) and Intel (http://ift.tt/2y99Rxz)(INTC)--posted better-than-expected (http://ift.tt/2hcLpkl)their third-quarter reports (http://ift.tt/2hcLpkl).

Alphabet, Intel and Microsoft closed at record levels. Meanwhile, Microsoft jumped 6.4%, while Amazon's shares rallied more than 13%. Microsoft's climb delivered a 40-point tailwind (http://ift.tt/2zIW0KG) to the Dow, helping offset losses by Chevron, Merck & Co. Inc.(MRK) and General Electric(GE).

Read:Alphabet could be headed for a $700 billion market cap (http://ift.tt/2yOXDXJ).

Plus:Amazon revenue hits a record and calms investors' fears (http://ift.tt/2iElupj)

Tesla earnings:Model 3 production, demand under the microscope (http://ift.tt/2y7xeCJ)

See:Exxon earnings--chemicals, refining expected to show strong margins (http://ift.tt/2xs2flo)

(http://ift.tt/2iElupj)What did analysts say?

"The rally on Wall street today is all driven by gains in FAANGs, so the market cap of these stocks is dominating the price action," said Mike Antonelli, equity sales trader at Robert W. Baird & Co.

FAANG refers to the largest technology companies such as Facebook Inc. (FB), Amazon, Apple Inc., Netflix Inc. (NFLX) and Google-parent Alphabet

"Many on the street are no doubt applauding today's GDP report as a blowout win. We now have the best two-quarter performance since early 2015. Does this give the Fed more ammo for a rate increase in December? You bet," said Mike Loewengart, VP, Investment Strategy at E*TRADE.

Loewengart cautioned, however, that there are still "a ton of uncertainty swirling around the GOP tax plan, historically high valuations, and low inflation remains a lurking presence."

What are other markets doing?

The euro weakened after the European Central Bank decision to reduce and extend its monthly bond purchases.

Read:Draghi averts 'taper tantrum'-- for now--as ECB takes baby step toward end of QE (http://ift.tt/2i6TuH0)

Plus:'Like stealing away from a party through the backyard'--analysts react to ECB move (http://ift.tt/2zapCV6)

The dollar was rising across the board (http://ift.tt/2iDkdyK) after the House of Representatives passed a budget resolution (http://ift.tt/2ljeTBw) on Thursday, which was viewed as an encouraging sign for tax cuts. The ICE Dollar Index was up 0.5% at 95.052. The yield on the 10-year Treasury note was slightly lower at 2.43%.

And:Is the euro rally toast after ECB unveils dovish bond-buying cutback? (http://ift.tt/2xqsBEl)

Oil prices rallied to settle at $53.90 (http://ift.tt/2iEi0mK) a barrel, while gold was finished highe (http://ift.tt/2i9SNfM)r at $1,271.80 an ounce.

Stocks in Asia mostly rallied (http://ift.tt/2iF6uHz), fueled by strong tech earnings out of the U.S. after the close. However, Australian stocks fell after judges ousted five lawmakers (http://ift.tt/2y99iUt), including the country's deputy leader, over an obscure constitutional law.

What else are investors watching?

President Donald Trump is leaning toward appointing Fed Gov. Jerome Powell (http://ift.tt/2ySMRjn)to be the next chairman of the central bank, according to a report by Bloomberg, citing three people familiar with the matter.

See:MarketWatch's economic calendar (http://ift.tt/1Airi5i)

Which stocks are in focus?

Macy's Inc. (M) fell 7.7%, with Kohl's Corp.(KSS) down 4.6% after fellow department store J.C. Penney Co. Inc.(JCP) issued a profit warning for the third quarter and full year. (http://ift.tt/2gI74Qz)J.C. Penney shares plunged 15%.

Shares of Mattel Inc.(MAT) skidded 8.9%, after a similar tumble late Thursday. The toy maker posted a surprise loss for the quarter, on a sharp decline in sales for its American Girl dolls.

Read:American Girl dolls are dying, and taking Mattel with them (http://ift.tt/2llXrfx)

Gilead Sciences Inc.(GILD) shares fell 1% after earnings fell by less than expected (http://ift.tt/2y99SBD) late Thursday. But executives warned that the worst has yet to come for sales of its hepatitis C treatments.

Shares of Huntsman Corp.(HUN) rose 4.2% on the heels of the failure of its proposed merger (http://ift.tt/2gI6Hpa) with Swiss chemical company Clariant AG (CLN.EB). Clariant shares fell 0.9% in European trading after both companies called the deal off on activist pressure.

Apple's stock (AAPL) rose 3.6%, with social media frenzied as advance orders (http://ift.tt/2gqGbk3) for the iPhone X began early Friday. Estimates by two market-research firms said the iPhone 8 saw the weakest sales (http://ift.tt/2lkLjvv) of any of the company's smartphones in recent years. Apple will report fourth-quarter results on Nov. 2.

Meanwhile, investors were watching shares of CVS Health Corp. (CVS) and Aetna Inc(AET) after The Wall Street Journal on Thursday said the pair were considering a $66 billion merger. Shares of CVS Health (http://ift.tt/2zTlXrK) fell 5.9%, while those for Aetna declined 3.1%.

Shares of Axalta Coating System Ltd. (AXTA) rallied 17% a day after the Philadelphia-based coating maker reported better-than-expected third-quarter results.

--Barbara Kollmeyer contributed to this article

(END) Dow Jones Newswires

October 27, 2017 16:38 ET (20:38 GMT)

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