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Stocks End at Records As Wall Street Looks Past Apple, Amazon Woes

Supply chain worries at tech giants following earnings reports draw muted response from investors.

The Dow, S&P 500, and the Nasdaq all closed at record highs Friday as Wall Street looked beyond disappointing results from Apple  (AAPL) - Get Apple Inc. (AAPL) Report and Amazon  (AMZN) - Get Amazon.com, Inc. Report and focused on strong earnings reports.

The Dow Jones Industrial Average finished up 89 points, or 0.25%, to 35,819.56, while the S&P 500 gained 0.19% and the Nasdaq rose 0.33%.

The S&P 500 and the Nasdaq both reached intraday highs on Friday as well. The S&P posted a monthly gain of more than 6.5% in October, its best single-month advance since November 2020.

The core July PCE Price Index rose 3.6% from last year, easing from the multidecade highs recorded in June, and 0.3% on the month, the Bureau of Economic Analysis reported. The figures were largely in line with Wall Street forecasts.

Apple fell after noting that supply chain woes ripped $6 billion from its September quarter sales causing its first quarterly revenue miss in five years.

Amazon shares moved lower, erasing nearly all their gains for the year, after the world's biggest online retailer forecast softer-than-expected holiday sales. The report followed a $2 billion hit from labor costs and supply chain disruptions to its third quarter earnings.

Amazon CFO Brian Olsavsky cautioned that costs linked to hiring, inflation and other "operational disruptions" could rise to as high as $4 billion over the December quarter. He forecast revenue of between $130 billion and $140 billion

"Disappointing Apple and Amazon results last night has pulled the tide back slightly from a very bullish month," Louis Navellier, chief investment officer at Navellier & Associates, said. "These are very big names to go red during a bullish run. Underneath most [of] it are logistics problems, not a lack of demand."

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At the same time, Navellier added "concerns about China seem to be fading which has the potential to be a much bigger problem than earnings disappointments."

"There are plenty of winners to take the lead from any that stumble," he said.

Mike Loewengart, managing director of investment strategy with E-Trade Financial, noted that "the curveball thrown from FAANG favorites puts supply chain disruptions and labor shortages center stage."

"While disappointing megacap earnings may rattle some investors, keep in mind that the Nasdaq and S&P hit record highs this week on the heels of broad earnings strength from a swath of companies," he said. 

"So volatility could be expected as supply and jobs concerns loom large, but jury is still out on just how long they’ll stick around."

Chevron  (CVX) - Get Chevron Corporation Report finished higher after a rise in oil and gas prices from last year's pandemic lows led to the company's strongest quarterly profit in eight years and prompted speculation of a dividend hike.

U.S. Steel  (X) - Get United States Steel Corporation Report surged after its best third-quarter profit on record, a dividend boost and plans to repurchase around $300 million of shares. 

AbbVie  (ABBV) - Get AbbVie, Inc. Report ended higher after the pharmaceutical titan reported stronger-than-expected results for the third quarter and lifted earnings guidance for the full year.