Stocks rise slightly after strong GDP report

Stocks traded slightly higher on Friday as investors weighed better-than-expected economic data against a mixed batch of quarterly earnings.

The S&P 500 climbed 0.2%, while the Dow Jones Industrial Average rose 32 points. The Nasdaq Composite hovered around the flatline.

First-quarter gross domestic product was 3.2%, the Commerce Department said on Friday, topping the consensus economist estimate of 2.5%, according to Dow Jones. An increase in exports drove the increase. The better-than-expected print was driven by a rise in exports.
“The economic expansion will set new records for longevity in July and it looks like there is no stopping this economy,” said Chris Rupkey, chief financial economist at MUFG, in a note. “We had all but given up on the first quarter with the Federal government shutdown ending January 25, frigid winter weather conditions shutting down manufacturing production, and the fears of a world growth slowdown.”

“So far the fears are unfounded,” Rupkey said.

But stock gains were kept in check after companies like Exxon Mobil and Intel delivered quarterly reports that disappointed investors.

Dow member Exxon fell more than 2% after reporting quarterly earnings per share that badly missed analyst expectations. The company’s results were dragged down by poor performances in its refining and chemicals businesses. Intel, another Dow component, fell more than 10% after the company issued light revenue guidance for the year.

“The burden of proof is fairly high,” said Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management. “Investors’ appetite for companies that either disappoint or offer lower guidance on a go-forward basis tends to be met with a pretty sharp reaction.”

Those results overshadowed stronger-than-expected numbers from companies like Amazon and Ford Motor.

Amazon shares traded 0.7% higher after results topped expectations on Thursday and Wall Street analysts trumpeted its announced push to one-day delivery for Prime members.

Ford Motor, meanwhile, jumped 10% after issuing better-than-forecast quarterly numbers, which were driven by strong truck and SUV sales in North America.

Other companies that reported between Thursday afternoon and Friday morning include, Mattel, Starbucks and American Airlines.


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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya