By Geoffrey Smith
Investing.com — U.S. stock markets opened higher Friday, mainly due to a surge in Big Tech megacaps after they published blowout earnings after the closing bell on Thursday.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 32 points, or 0.1% at 26,345 points, while the S&P 500 was up 0.2% and the Nasdaq Composite, inevitably, outperformed with a gain of 0.9%.
Facebook (NASDAQ:FB) stock gained 7.2% in the first few minutes of trading, while Apple (NASDAQ:AAPL) stock gained 6.0% and Amazon (NASDAQ:AMZN) stock rose 5.0%. Alphabet was the odd one out, its Class C (NASDAQ:GOOG) shares falling 3.7% and its Class A (NASDAQ:GOOGL) shares falling 4.4% after it registered a first ever quarterly advertising revenue decline at Google.
Broader gains were capped, however, by the awareness that there has been no agreement on Capitol Hill on extending the enhanced unemployment benefits that sustained U.S. household consumption through the first months of the pandemic. Fears of a looming drop in spending were fed by data showing that personal incomes fell by 1.1% in June, more than the 0.5% drop expected.
The University of Michigan’s final reading for its consumer sentiment index for July also disappointed, being revised down to 72.5 from an initial estimate of 73.2.
“Financial markets are already priced for a vigorous recovery, but with virus fears on the rise, jobs being lost and incomes being squeezed as unemployment benefits are cut, we feel the recovery could be much bumpier,” said analysts at ING in a morning research note.
Record losses from the country’s two biggest oil producers, Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), also weighed, with Chevron in particular hit by a multi-billion-dollar write-off of its Venezuelan business. Chevron stock fell 3.3% while Exxon Mobil stock fell 0.6%.
Nvidia (NASDAQ:NVDA) stock rose 0.8% after reports saying that it is in talks to buy U.K.-based chip designer ARM for more than $32 billion from SoftBank (OTC:SFTBY).
Caterpillar (NYSE:CAT) stock fell 3.2% after results that showed a big hit to capital spending by its major customers (notably the oil and gas industry), while Under Armour (NYSE:UA) stock fell 4.5%, reversing gains made in premarket trading, after reporting a steep fall in revenue that was only marginally better than feared.
In commodity markets, Crude Oil Futures recovered after Thursday’s driven slide, while Gold Futures and Silver Futures both regained momentum as bond yields and – implicitly – real interest rates slid lower.