Technology stocks led a broad rally on Wall Street Friday, capping another strong week for the market, as investors welcomed solid profits from Apple and other companies.
The S&P 500 rose 2.5% and posted its first back-to-back weekly gains since August. The Dow Jones Industrial Average rose 2.6% and the tech-heavy Nasdaq composite climbed 2.9%. Smaller company stocks also gained ground, lifting the Russell 2000 index by 2.3%.
Apple’s latest quarterly results showed the iPhone maker made even fatter profits during the summer than expected. Its shares rose 7.6% and led a rally in technology stocks that had largely been beat up a day earlier.
Intel jumped 10.7% after delivering much bigger profit than analysts forecasted even though it said it saw “worsening economic conditions.”
Gilead Sciences soared 12.9%, and T-Mobile US gained 7.4% after they also topped Wall Street’s profit expectations.
Investors were also encouraged by a report on consumer spending that came a day after new data showing the economy grew modestly in the third quarter and inflation eased.
“You have an economy that almost refuses to keel over, an economy that at its core is resilient, but a the same time inflation is easing and that is what the Fed wants and that’s obviously what the market wants,” said Quincy Krosby, chief equity strategist for LPL Financial.
That’s helped fuel hopes on Wall Street for a “pivot” by the Federal Reserve, where the central bank dials down the big interest-rate hikes that have shaken the market. Such a move could boost the market, though many analysts say such hopes may be overdone.
The central bank has been very clear about its plan to err on the side of going too far in order to tame inflation, which means the big gains on hopes of a pullback seem premature, said Liz Young, chief investment strategist at SoFi.
“This rally has now gotten a bit irrational and fragile at this level,” Young said.
The S&P 500 rose 93.76 points to 3,901.06. The Dow gained 828.52 points to 32,861.80. The Nasdaq rose 309.78 points to 11,102.45. The Russell 2000 gained 40.60 points to 1,846.92.
Many big U.S. companies have been reporting stronger earnings than expected, though the bag remains decidedly mixed.
Solid earnings on Friday helped to offset a 6.8% drop for Amazon, which offered a weaker-than-expected forecast for upcoming revenue. It was the latest Big Tech company to take a beating this week after reporting some discouraging trends. It’s a sharp…