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Stocks End Lower as Wall Street Takes a Pause From Record Highs

Stocks drop as investors pause at month's end to weigh earnings from the likes of Amazon, Twitter and Chevron.

Stocks finished lower Friday as investors paused at month's end to weigh earnings from the likes of Amazon.com  (AMZN) - Get Amazon.com Inc. Report, Twitter  (TWTR) - Get Twitter Inc. Report and Chevron  (CVX) - Get Chevron Corporation Report.

The Dow Jones Industrial Average finished down 185 points, or 0.54%, to 33,874, the S&P 500 declined 0.72% and the Nasdaq fell 0.85%.

For the week, the Dow declined 0.5%, the S&P 500 was flat (it ticked up exactly 1 point), and the Nasdaq slipped 0.4%.

The Dow rose about 2.7% in April, while the Nasdaq gained 5.4% and the S&P 500 climbed 5.2%.

For the year to date, the Dow has risen 10.5%, the S&P 500 has gained 11.3% and the Nasdaq has added 8.3%.

The benchmark 10-year Treasury yield edged lower to 1.629% on Friday. It remains on course for the biggest monthly decline since July, according to Bloomberg.

Consumer spending in the U.S. jumped 4.2% in March as most Americans received a third round of stimulus checks, and personal incomes soared a record 21.1%. 

The personal consumption expenditure price index, the preferred measure of inflation at the Federal Reserve, rose 2.3% in March from a year earlier, the biggest jump in more than two years. 

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The S&P 500 closed at a record high 4,211 on Thursday after economic data pointed to a brisk recovery for the U.S. economy in the first quarter.

The jump in spending and incomes helped the U.S. economy expand at a 6.4% annualized rate in the first three months of 2021 amid fresh stimulus from the U.S. government, continued support from the Federal Reserve and the rollout of COVID-19 vaccinations.

With most signs pointing to a rebounding U.S. economy, traders have turned their focus to corporate earnings, which largely have exceeded Wall Street’s expectations. According to Bloomberg, of the 284 companies in the S&P 500 that have reported results so far, 89% have met or topped estimates.

"The stock market has more room to run as first-quarter earnings are off to a strong start and the post-COVID-19 economic boom is beginning to be reflected in earnings guidance and nearly all major economic data points," said Rod von Lipsey, managing director, UBS Private Wealth Management. "We raised our S&P 500 price target for year-end 2021 to 4,400 from 4,200."

Amazon.com  (AMZN) - Get Amazon.com Inc. Report ended slightly off Friday after reporting first-quarter earnings that easily topped estimates thanks in part to a surge in revenue from its web services division. Revenue jumped 44% from last year to $108.5 billion, topping analysts' estimates of $104.55 billion. 

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Twitter  (TWTR) - Get Twitter Inc. Report posted better-than-expected first-quarter earnings and revenue but the stock fell sharply, ending down 15.13%, after the social media company fell short on expectations for user growth and issued a lukewarm forecast.

Chevron  (CVX) - Get Chevron Corporation Report reported first-quarter adjusted earnings that topped analysts' estimates and better-than-expected revenue despite an overall decline in production linked to the global coronavirus pandemic and brutal winter storms in Texas. 

Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report posted stronger-than-expected first-quarter earnings and held its capital spending plans in place as it faces pressure from activist shareholders to accelerate its transition to lower-carbon markets.