Wall Street Shakes Off Early Decline, As Microsoft and Apple Stock Fall

US stocks shook off early declines and closed out the last trading day of the month with modest gains on Friday as a rise in Microsoft Corp helped offset declines in Amazon.com Inc and Apple Inc after disappointing quarterly earnings from the online retailer and iPhone maker.

Microsoft’s shares closed at a record high of US$331.62 and ended the session with a market capitalization of US$2.49 trillion, surpassing Apple’s market cap of about US$2.48 trillion.

Apple lost 1.81 percent after it warned that the impact of supply chain disruptions would be even worse during the current holiday sales quarter, while Amazon.com declined 2.15 percent as it forecast downbeat holiday-quarter sales amid labor shortages

“The takeaway from today is the resilience to the overall index, despite 10 percent of market cap in two companies disappointing and yet the market is flat. It’s the resilience of the marketplace, it suggests to me the trend is still intact,” said David Joy, chief market strategist at Ameriprise Financial in Boston. “Maybe the numbers were a surprise to the analyst community, but not the reasons for the disappointment so there is still a general view that this is not business lost, but business postponed and the trend in the economy and in the market continues to be to the upside.”

The Dow Jones Industrial Average on Friday rose 89.08 points, or 0.25 percent, to 35,819.56, the S&P 500 gained 8.96 points, or 0.19 percent, to 4,605.38 and the NASDAQ Composite added 50.27 points, or 0.33 percent, to 15,498.39.

The S&P 500 had fallen as much as 0.65 percent earlier in the day. The benchmark index advanced 1.3 percent for the week, its fourth straight weekly climb, marking its longest weekly streak of gains since April. For the month, the S&P rose 6.9 percent, its biggest monthly rise since November last year.

The Dow rose 0.4 percent for the week, while the NASDAQ gained 2.7 percent, also marking four straight weekly gains for each.

The Dow climbed 5.8 percent this month, its best monthly performance since March, while the NASDAQ jumped 7.3 percent for its biggest monthly percentage gain since November last year.

Apple had risen about 2.5 percent, while Amazon gained 1.6 percent in Thursday’s session, helping to send the S&P 500 and NASDAQ to closing record highs.

With 279 companies in the S&P 500 having reported results through Friday morning, 82.1 percent have topped earnings expectations, according to Refinitiv data. The current year-on-year earnings growth rate for the third quarter is 39.2 percent.

Market participants have been closely attuned to the ability of companies to maneuver through labor shortages, rising price pressures and clogs in the supply chain, and a solid earnings season has helped investors overlook a mixed macroeconomic picture with a US Federal Reserve that is poised to begin to trim its massive bond purchases soon.

The central bank’s next policy announcement is on Wednesday.

Data showed that US consumer spending increased solidly last month, while inflation pressures are broadening.

The data indicated the jury is still out on whether the Fed’s “transitory” view on inflation will hold true.

AbbVie Inc advanced 4.56 percent as the US drugmaker raised its adjusted profit forecast for this year for the third time this year.

Starbucks Corp tumbled 6.3 percent after the coffee chain said it expects fiscal 2022 operating margin to be below its long-term target due to inflation and investments.