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HomeNewsFinanceDow, S&P, and Nasdaq push higher despite more megacap weakness

Dow, S&P, and Nasdaq push higher despite more megacap weakness


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Major market averages open up Friday’s trading session higher, despite Amazon becoming the latest megacap stock to disappoint Wall Street.

Early on and the tech focused Nasdaq Composite (COMP.IND) is +0.5%, at the same time the SAP 500 (500) is +0.7%, and the Dow (DJI) has tracked upward by 1.2%.

The broader market is still on track to eke out a gain for the week. The S&P (SP500) (SPY) is up 1.8% for the week. The Nasdaq (COMP.IND) (QQQ) is down 0.1%, but the Dow (DJI) (DIA) is on track for the fourth-straight winning week, up 3.6% avoiding most of the megacap weakness.

Putting the outsize impact of those few stocks in perspective, the S&P 500 Equal-Weighted Index (RSP) is up 3.4% for the week, more than double the rise in SPY.

Amazon is down 10% after a downbeat sales forecast, but it’s well off the overnight lows. Goldman called the initial plunge an overreaction, saying they “would have expected a small negative reaction compared to this pronounced downtick for a stock that has already consistently underperformed the market in the last few years.”

Apple is up with caution on the holiday season trimming enthusiasm after it topped forecasts.

Rates are higher, The 10-year Treasury yield (US10Y) is up 5 basis points to 3.99%. The 2-year yield (US2Y) is up 8 basis points to 4.40%.

On the economic calendar, September income and spending figures arrived. Personal income and outlays came in at +0.4% above the +0.3% consensus. Additionally, personal spending came in at +0.6% north of the forecasted 0.4%.

“A willingness to leverage household balance sheets has allowed US consumers to continue to indulge in the national pastime of spending money, despite falling real wages,” UBS chief economist Paul Donovan said. “Real spending should remain positive – but there is less spending on goods and more spending on having fun.”

“Concerns from companies like Amazon do not necessarily reflect overall consumer demand – Amazon is not, yet, the same thing as the US economy,” he said. “The personal consumer expenditure deflator is expected to be fairly stable. That belies a lot of activity beneath the surface – durable goods price inflation has essentially halved from its peak earlier this year.”

Additionally, September pending home sales sink to 10.2% M/M to 79.5 compared to the forecasted -3.8%.

Among other active issues, Pinterest is rallying following steady user numbers.

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