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