Investors cheered by big tech earnings
NEW YORK — Stocks advanced slightly Friday as investors cheered the quarterly results of three large technology companies: Google, Microsoft and Amazon.
The modest gains helped close out a relatively strong week for U.S. stocks, with the three major indexes rising between 1.4 and 3.2 percent in five days. The Standard & Poor’s 500 and Nasdaq composite closed at record highs.
Investors now prepare for the biggest week of earnings season. Next week, more than 150 companies in the S&P 500 will report their results, including such market-moving names as Apple, Ford, Visa, Pfizer and Exxon Mobil.
On Friday, the Dow Jones industrial average rose 21.45 points, or 0.1 percent, to 18,080.14. The S&P 500 rose 4.76 points, or 0.2 percent, to 2,117.69; and the Nasdaq rose 36.02 points, or 0.7 percent, to 5,092.08.
The Nasdaq beat its record of 5,048.62, set on March 10, 2000, at the height of the dot-com boom, on Thursday.
Microsoft, Amazon and Google all rose sharply after releasing their quarterly results, which helped lift the Nasdaq more than the Dow or S&P 500. A common theme was signs that the companies were growing sales outside of their bread-and-butter businesses.
Amazon jumped $55.11, or 14 percent, to $445.10 in heavy trading. While the company reported a quarterly loss, Amazon showed it had 49 percent sales growth in Amazon Web Services, its cloud computing division. The promise that cloud computing could bolster Amazon’s bottom line was enough to send investors flooding into the stock.
Microsoft rose $4.53, or 11 percent, to $47.87. The software giant had results that beat expectations and, like Amazon, showed promising growth in its cloud computing business. Lastly, Google rose $16.20, or 3 percent, to $573.66. Though the search and advertising company missed analysts’ expectations, the company had strong growth in mobile advertising.
Investors have been looking for Google, Microsoft and Amazon to show some sort of progress outside their traditional businesses. Microsoft cannot solely rely on computer sales to drive its profits, Amazon has very low profit margins on the products it sells and Google is heavily exposed to desktop computer advertising while the world is shifting to mobile.
“I think we are starting to see actual evidence that their strategies are working, especially at Microsoft and Amazon,” said Dan Morgan, a portfolio manager at Synovus Trust Company, who owns shares of all three companies.
The dollar fell to 118.93 yen from 119.62 yen. The euro was little changed at $1.0866. U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.91 percent from 1.96 percent late Thursday.