Here are five things you must know for Friday, Feb. 2:
1. -- Stocks Fall Sharply Ahead of Jobs Report
U.S. stock futures were falling sharply on Friday, Feb. 2, as global investors eyed a sharp rise in government bond yields, a weakening U.S. dollar and a mixed first quarter from tech giant Apple Inc. (AAPL - Get Report) .
A notable spike in benchmark U.S. Treasury yields, which took 10-year notes to a near four-year high of 2.8%, had investors on edge amid signals of faster inflation in the world's largest economies and the impact it will have on growth and interest rates.
Contracts tied to the Dow Jones Industrial Average fell 227 points early Friday, while those tied to the S&P 500 slid 19 points, ahead of the release of the official U.S. jobs report for January.
Besides the jobs report, the economic calendar in the U.S. on Friday includes Consumer Sentiment for January at 10 a.m., and Factory Orders for December at 10 a.m.
Earnings are also expected Friday from Chevron Corp. (CVX - Get Report) , Exxon Mobil Corp. (XOM - Get Report) ,Charter Communications Inc. (CHTR - Get Report) , Sprint Corp. (S - Get Report) and Phillips 66 (PSX - Get Report) .
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2. -- Amazon Surges as Earnings Near $1.9 Billion
Amazon.com Inc. (AMZN - Get Report) reported one of its best fourth quarters ever, with Alexa at the forefront of its recent milestones. Planning ahead, the e-commerce giant said it will focus on capital investments in the grocery and food sector in 2018.
Music listening on Alexa devices, for instance, was up three times in the fourth quarter, according to Chief Financial Officer Brian Olsavsky. Alexa usage on the Amazon Fire TV Stick rose nine times year over year.
"Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don't see positive surprises of this magnitude very often -- expect us to double down," CEO Jeff Bezos said in the earnings statement. "We've reached an important point where other companies and developers are accelerating adoption of Alexa."
Amazon.com said fourth-quarter earnings more than doubled to nearly $1.9 billion, or $3.75 a share, way above Wall Street's forecast of $1.88. Net sales rose 38% to $60.5 billion, above the anticipated $59.75 billion.
Amazon Web Services had $5.1 billion in sales, pretty much on par with the projected $5 billion earmark. AWS grew 38% year over year, compared with a 29% growth rate for North American sales and 45% for international.
Amazon shares rose 5.8% in premarket trading on Friday to $1,470.40. The stock, prior to Amazon's earnings release, had risen 19% so far in 2018.
3. -- Apple Sold Fewer iPhones
Apple Inc. (AAPL - Get Report) rose 0.8% in premarket trading to $169.13 after wavering after-hours on Thursday after the tech giant reported fiscal first-quarter iPhone shipments that missed consensus estimates.
Apple sold 77.3 million iPhones in the quarter, below estimates of 80.2 million and the 78.3 million iPhones that were sold during the year-earlier quarter. But average selling prices for the iPhone in the quarter of $796 topped expectations of $756.
Earnings in the quarter were $3.89 a share, 3 cents above estimates. Revenue of $88.3 billion also topped Wall Street forecasts.
Apple guided for second-quarter revenue of between $60 billion and $62 billion, short of consensus estimates of $65.4 billion.
Apple Chief Financial Officer Luca Maestri, on the earnings call Thursday, said Apple's below-consensus guidance isn't a sign of weak iPhone demand. He said Apple expects iPhone revenue -- up 13% last quarter to $61.6 billion -- will once more grow at a double-digit clip this quarter, and that the growth rate for iPhone sell-through (end-user sales) will actually be higher in the March quarter than the December quarter.
Maestri also said Apple aims to "become approximately net cash neutral over time."
That's a big deal, according to TheStreet's Eric Jhonsa, since Apple had $163 billion in net cash ($285 billion in cash minus $122 billion in debt) as of Dec. 30. Throw in the fact that the company's annual free cash flow is north of $50 billion and growing, and this sets the stage for some giant capital returns, Jhonsa wrote.
Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
"Bottom line, this was a strong quarter for the company and the negativity pressuring shares in recent weeks was simply overblown," said Cramer and the AAP team.
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4. -- Alphabet Tumbles on Earnings MissAlphabet Inc. ( GOOGL - Get Report) fell 3.5% in premarket trading on Friday after the parent of Google missed Wall Street earnings forecasts but topped revenue expectations.
Google earned $9.70 a share in the fourth quarter, while analysts polled by FactSet expected profit of $9.98. Including the impact of the new U.S. tax law, Alphabet lost $4.35 a share.
Fourth-quarter revenue rose 24% to $33.32 billion and well exceeded the consensus of $25.57 billion.
Ruth Porat, Alphabet's chief financial officer, told investors that mobile search was "again leading the way." Meanwhile, hardware such as the Pixel phone and Google Home personal assistant, Google Cloud and Google Play show "substantial growth" that "continues to highlight the benefits of our investments," she said.
Sales from core Google businesses, including search and mobile search, rose nearly 22% to $27.2 billion in the quarter.
Google's paid clicks, a closely watched metric, grew 43% though the average cost per click declined 14%. Total traffic acquisition costs increased 33% from a year earlier to $6.45 billion.
"Overall, we believe that the fundamentals of the company are still in place and the rising TAC is simply a cost of doing business in a rapidly growing high-volume area that is a different opportunity from what the company was built on," said Jim Cramer and the AAP team, which holds Alphabet in the Action Alerts PLUS Charitable Trust Portfolio. "Although rising TAC will always be directly on the minds of investors, it is the terrific growth in mobile that helps fund Alphabet's diversification efforts, and this should be welcomed."
5. -- Sony Names New CEO
Sony Corp. (SNE - Get Report) named Chief Financial Officer Kenichiro Yoshida as its new president and CEO on Friday, replacing Kazuo Hirai, who led a turnaround at the Japanese electronics and entertainment company and will stay on as chairman.
Yoshida has experience in Sony's U.S. operations, as well as its network, financial and investor relations businesses, according to the Associated Press.
Hirai stressed Yoshida will continue the path he had set in place. Sony is about to record its best results in two decades this fiscal year.
American depositary receipts of Sony jumped 6% in premarket trading on Friday.
This article has been updated to include earnings from Merck.
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