Stocks opened Friday in positive territory and stayed there through the close as a round of well-received blue chip earnings offset a dismal October jobs report. Investors also kept one eye trained on next week's potentially market-moving lineup that includes Election Day and the next Fed meeting.
Starting with the earnings news. Amazon.com (AMZN) stock surged 6.2% – gaining $121 billion in market value along the way – after the e-commerce giant beat top- and bottom-line expectations for its third quarter.
"Perhaps the biggest takeaway from the print was Amazon's fourth quarter operating income guidance calling for $16 billion to $20 billion versus $13.2 billion in Q4 2023," says UBS Global Research analyst Stephen Ju (Buy).
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While investors have expressed concern that the company's investment initiatives will weigh on income and margins, Ju notes that Amazon is "looking to carefully manage headcount and operating expenditures to fund its rising capital expenditures to protect free cash flow generation for shareholders."
Intel pops on strong guidance
While Amazon's post-earnings price action was impressive, it was Intel (INTC) that was the best Dow Jones stock today. Shares closed up 7.8% after the chipmaker reported higher-than-expected revenue and strong fourth-quarter guidance.
Analysts aren't convinced this report gives the all-clear for the beaten-down tech firm, which has shed 54% for the year to date and has been a terrible choice for long-term investors.
"The good news is that much of the heavy lifting is behind the company as we look ahead to the last quarter of a challenging year with expectations for a more stable operating environment in 2025, which, importantly, should include a return to positive adjusted free cash flow," says Stifel analyst Ruben Roy (Hold).
However, Roy says the bad news is that Intel's artificial intelligence (AI) strategy appears to have changed again, focusing on a longer-term approach that could put it on the back foot in the rapidly evolving industry.
Apple falls after earnings
Not all of today's earnings reactions were positive. Apple (AAPL), for instance, fell 1.3% even after the iPhone maker reported better-than-expected results for its fiscal fourth quarter.
Investors chose instead to focus on slipping sales in China (-0.3% year over year) and the company's outlook for "low to mid-single-digits" revenue in its fiscal first quarter.
Nevertheless, Wall Street remains overwhelmingly bullish toward Apple. "We come away from these results feeling more confident about the AI thesis for Cupertino which will spark a multiyear upgrade cycle that will result in a supercycle and ultimately drive iPhone growth towards the high single digits," says Wedbush analyst Daniel Ives (Outperform, the equivalent of a Buy).
Despite Apple's weakness, the Dow Jones Industrial Average added 0.7% to 42,052 thanks to strength in Amazon and Intel shares. The S&P 500 rose 0.4% to 5,728 and the Nasdaq gained 0.8% to 18,239.
Jobs growth slumps in September
Over on the economic calendar, data from the Bureau of Labor Statistics showed the U.S. added just 12,000 jobs in October, well below economists' estimates for 113,000 new positions. Jobs growth for August and September was downwardly revised by 112,000 jobs combined.
There was plenty of noise in this report thanks to recent hurricanes in Florida and the Boeing (BA) worker strike. However, there were some continuing signs of stability and resilience, "notably a steady unemployment rate with robust earnings growth," says Scott Anderson, chief U.S. economist at BMO Capital Markets.
In other economic news, the Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index (PMI) fell to 46.5% in October from 47.2% in September.
The index "has now signaled contraction [readings below 50] in activity for practically two-straight years," says Wells Fargo Economist Tim Quinlan. "But the simple need to replace equipment combined with some clarity in the post-election environment should be supportive of coming capital expenditure plans."
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