VOL. 42 | NO. 17 | Friday, April 27, 2018
Facebook leads technology stock rally as US indexes climb
NEW YORK (AP) — U.S. stocks are rising Thursday as Facebook leads a big rally for technology companies. The social media platform jumped after its recent data privacy scandal didn't appear to affect business in the first quarter. Other big technology companies also moved higher, as did retailers. Chipotle Mexican Grill, Ford and Visa also rose after they gave strong first-quarter reports.
KEEPING SCORE: The S&P 500 index rose 19 points, or 0.8 percent, to 2,659 as of 11:15 a.m. Eastern time. The Dow Jones industrial average added 189 points, or 0.8 percent, to 24,273. The Nasdaq composite advanced 96 points, or 1.4 percent, to 7,100. The Russell 2000 index of smaller-company stocks added 5 points, or 0.4 percent, to 1,556.
Three months ago the S&P 500 and Dow reached all-time highs. The indexes had been setting records regularly for the previous year and a half. But over the last three months, the market has been hit by worries about rising inflation and a potential trade war between the U.S. and China. The S&P is down 7.4 percent since Jan. 26 and the Dow has slumped 8.8 percent.
HAPPY FACE: Facebook surged 8.6 percent to $173.46 after the company's advertisers appeared to shrug off the privacy scandal that has surrounded the company. Facebook said its revenue jumped 49 percent in the first three months of the year, and there were few signs users or advertisers were abandoning the company since the scandal broke in mid-March. Facebook has faced a backlash about how it collects and uses data since the revelation that Cambridge Analytica, a data mining firm linked to the Trump campaign, had gained information on up to 87 million of its users.
Facebook stock is down 7 percent since then.
Other social media companies also rose. Twitter gained 5 percent to $31.25 and Snap picked up 3.3 percent to $15.02. Alphabet, Google's parent company, the only digital publisher larger than Facebook, rose 1.6 percent to $1,039.59.
EXTRA GUAC ALL AROUND: Chipotle Mexican Grill climbed after the company said sales improved in the first quarter, partly because of higher prices, and investors hoped the chain is starting to turn its business around after repeated food safety scares. New CEO Brian Niccol also said the company intends to expand its delivery service and is considering drive-thrus. The shares rose 23.3 percent to $418.54. They traded as high as $749 in mid-2015.
PUT IT IN DRIVE: Ford rose after the company said it will no longer sell the Fusion midsize car, Taurus large car, CMax hybrid compact and Fiesta subcompact in the U.S., Canada and Mexico because of falling profitability. Its only remaining cars in the region will be the Mustang and a compact Focus crossover vehicle. Ford is aiming to slash more than $20 billion in costs to become more competitive in the changing auto market.
The stock gained 2.1 percent to $11.35. Auto parts seller O'Reilly Automotive jumped 14.1 percent to $259.77 after it topped analyst projections for the first quarter of the year, and competitor Advance Auto Parts rose as well.
BUSY SIGNAL: AT&T fell 6.3 percent to $32.99 after its profit and revenue fell short of Wall Street estimates, and analysts said its video business struggled. E-commerce company eBay slid 6.6 percent to $38.28 after its first-quarter sales and second-quarter forecast disappointed Wall Street.
ENERGY: Benchmark U.S. crude oil gained 0.3 percent to $68.23 a barrel in New York. Brent crude, used to price international oils, rose 0.8 percent to $74.61 a barrel in London.
Oil prices have surged in recent months, and that has driven up fuel costs for many companies. Those expenses were a problem for airlines in the first quarter, as American said its profit fell 45 percent over the first three months of the year and cut its profit forecast for the rest of the year. Its stock lost 5 percent to $42.97.
Meanwhile Southwest Airlines said bookings are down since the fatal accident on one of its planes on April 17. Partly for that reason it expects an important revenue measurement to fall in the current quarter. Southwest also reported weaker-than-expected revenue in the first quarter. Its stock slid 2.8 percent to $52.32.
BONDS: Bond prices edged higher. The yield on the 10-year Treasury note dipped to 3 percent from 3.03 percent.
EUROPE: The European Central Bank left its key interest rates and monetary stimulus settings unchanged on Thursday, as expected. ECB President Mario Draghi said the European economy is still growing, but there is some evidence that growth has slowed down. He added that so far, the evidence isn't worrisome enough to consider changing the bank's stimulus and interest rate policy.
OVERSEAS: France's CAC 40 rose 0.7 percent and the British FTSE 100 added 0.4 percent. Germany's DAX gained 0.5 percent. Japan's benchmark Nikkei 225 index climbed 0.5 percent and South Korea's Kospi jumped 1.1 percent after Samsung reported better than expected earnings. Hong Kong's Hang Seng lost 1.1 percent.
CURRENCIES: The dollar rose to 109.38 yen from 109.34 yen and the euro dipped to $1.2112 from $1.2175.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay