Stocks End Mixed on Big Tech Earnings Blitz

U.S. equities mostly drifted lower on Thursday on lingering disappointment with the “big league” tax reform proposal from President Trump’s cabinet on Wednesday (which was a letdown, to be honest, short on specifics) as investors looked ahead to an avalanche of Big Tech earnings after the close.

We also have the eagerly awaited first-quarter U.S. GDP report on Friday, with expectations diminished after the Atlanta Federal Reserve Bank cuts its GDPNow real-time estimate to just 0.2% after weak retail sales numbers, an inventory drawdown and tepid manufacturing activity.

Fears of a government shutdown are rising as Democrats threatened to vote against a one-week stopgap spending measure should Republicans insist on healthcare reform efforts to repeal and replace parts of Obamacare.

In the end, the Dow Jones Industrial Average gained a fraction, the S&P 500 gained a fraction, the Nasdaq Composite gained 0.4% and the Russell 2000 lost 0.2%. Treasury bonds were stronger, the dollar moved higher, gold gained 0.1% and crude oil fell 1.3%, but finished off its worst levels as supply concerns continued to weigh. The strength in T-bonds boosted the ProShares Ultra Treasury Bond (NYSEARCA:UBT) recommended to Edge subscribers.

Breadth was slightly negative while volume was heavy, at 121% of the NYSE’s 30-day average. Technology stocks led the way with a 0.6% gain while telecoms were the laggards, down 1.3%.

Athletics apparel maker Under Armour Inc (NYSE:UA) gained 9.9% thanks to a Q1 earnings beat on strong revenues and margins. PayPal Holdings Inc (NASDAQ:PYPL) gained 6.2% on a Q1 earnings and revenue beat on a transaction count that was ahead of analyst estimates. Forward guidance was also raised. And Comcast Corporation (NASDAQ:CMCSA) gained 2.1% after Q1 earnings, operating earnings, earnings per share and operating cash flow all exceeded analyst estimates.

On the downside, F5 Networks, Inc. (NASDAQ:FFIV) fell 7.5% on an earnings and revenue miss and the issuance of weak forward guidance. And American Airlines Group Inc (NASDAQ:AAL) fell 5.2% on a Q1 earnings beat on in-line revenues as the market focused on costs. JPMorgan analysts also issued a downgrade.

After the close:

  • Alphabet Inc (NASDAQ:GOOG,NASDAQ:GOOGL) reported better-than-expected earnings of $7.73 per share (vs. $7.48 expected) on $24.8 billion in revenues (vs. $19.7 billion expected). Shares are up 4.1% in extended trading.
  •, Inc. (NASDAQ:AMZN) reported $1.48 in earnings per share (vs. $1.03 expected) on $35.7 billion in revenue (vs. $35.4 billion expected). Shares are up nearly 4% in extended trading.
  • Microsoft Corporation (NASDAQ:MSFT) reported earnings of 73 cents per share (vs. 69 cents expected) on $22.1 billion in revenue (vs. $23.6 billion expected). Shares are down 1% in extended trading.
  • Intel Corporation (NASDAQ:INTC) reported earnings of 66 cents per share (vs. 65 cents expected) on $14.8 billion in revenues (in-line with estimates). Shares are down 4% in extended trading.
  • Starbucks Corporation (NASDAQ:SBUX) reported earnings of 45 cents per share (in-line with estimates) on revenues of $5.3 billion (vs. $5.4 billion expected). Shares are down 4.2% in extended trading.
  • GoPro Inc (NASDAQ:GPRO) reported a loss of 44 cents per share (vs. a 46-cent loss expected) on revenues of $2.45 billion (vs. $2.32 billion expected). Shares are down 1.6% in extended trading.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.

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