The Morning Journal (Lorain, OH)
Stocks jump with a little help from Buffett
Apple led a rally in technology companies as Warren Buffett said he’d made another big investment.
NEW YORK » U.S. stocks made up for a shaky week with a strong finish Friday as Apple led a rally in technology companies. The tech giant hit an all-time high after Warren Buffett said he’d made another big investment.
Stocks got off to a mixed start after trade talks between the U.S. and China ended with few signs of progress. The April jobs report showed that hiring continued at a solid clip and wages continued to grow at a slow pace. Apple surged after Buffett said Berkshire Hathaway bought 75 million shares during the first quarter.
Alphabet, Cisco Systems and other technology companies rose, and retailers, banks, and household goods makers also rallied. Investors also cheered strong first-quarter results from companies including Shake Shack and Activision Blizzard.
“We went into this earnings season with very high expectations,” said Quincy Krosby, chief markets strategist for Prudential Financial. “When you go in with such high expectations, you expect near perfection.”
The S&P 500 index climbed 33.69 points, or 1.3 percent, to 2,663.42. The Dow Jones industrial average rose 332.36 points, or 1.4 percent, to 24,262.51. The Nasdaq composite jumped 121.47 points, or 1.7 percent, to 7,209.62. The Russell 2000 index of smaller-company stocks gained 19.05 points, or 1.2 percent, to 1,565.60.
Overall, stocks have taken small losses in choppy trading over the last two weeks. But for Apple, this was the best week in six and a half years.
Apple rose 3.9 percent to $183.83 after Warren Buffett told CNBC his company boosted its investment in Apple to more than 240 million shares altogether. Buffett told CNBC about the purchase ahead of Berkshire Hathaway’s annual meeting this weekend. Berkshire stock rose 2.1 percent to $195.64.
Apple climbed 13.3 percent for the week after it reported solid quarterly results and investors were pleased with its forecast of solid iPhone sales, which came as a relief. It also raised its dividend and announced a big stock repurchase.
Companies have done well in the first quarter, but stocks haven’t necessarily followed suit as investors worried about the U.S.-China trade spat, rising interest rates, and other issues. But on Friday investors responded.
After better-than-expected reports, burger chain Shake Shack surged 18 percent to $55.95 while music streaming company Pandora Media advanced 19.8 percent to $6.89. Video game maker Activision Blizzard gained 4.5 percent to $69.84. The stock had dipped Thursday afternoon after Activision’s results were released early.
U.S. employers stepped up hiring modestly in April, and the hiring estimate from March was revised higher. That’s evident the economy remains resilient even though some businesses are concerned about a possible trade war. While many employers say it’s difficult to find qualified workers, they have yet to significantly boost pay in most industries, a trend that continued last month.