Stocks dipped into tight losses early Friday, as Intel (INTC) weighed on tech stocks and above-forecast first-quarter GDP data eased early declines.
XAmazon.com (AMZN) edged higher, but Dow Jones stock Intel fell hard on disappointing earnings guidance, signaling another tough day for chips. Westerern Digital (WDC), Nvidia (NVDA) and Qorvo (QRVO) posted heavy early declines.
The Nasdaq slumped 0.7% as Intuit (INTU), Intel and Nvidia fell hardest among Nasdaq 100 stocks. The Dow Jones industrials and the S&P 500 each declined 0.2%.
(For updates on this story and other market coverage, visit the Stock Market Today.)
Airlines were mixed on earnings news, with Alaska Air Group (ALK) climbing and American Airlines (AAL) losing ground. Big oil leaders Chevron (CVX) and Exxon Mobil (XOM) slipped on earnings. Large foreign banks were under some pressure, as the Royal Bank of Scotland (RBS) and Deutsche Bank (DB) fell after their quarterly results.
On the upside, Ford (F) stock spiked after a first-quarter earnings blowout. Grubhub (GRUB) surged, despite weak guidance. Among IPOs, Jumia Technologies (JMIA) edged up the right side of a six-day pullback that formed an IPO base.
GDP Surge, But Demand Weakens
The economy grew above expectations in the first quarter, the Commerce Department reported, with GDP expanding 3.2% vs. consensus views for a 2.3% gain. The numbers were probably inflated by inventory builds and a decrease in imports, which boosts GDP data. Underlying demand appeared to weaken as business investment cooled and the CPE Price Index rose 1.3%, well below policymakers' 2% objective.
Inflation remained in check, with the GDP core price index up 1.3%, below the 1.6% forecast. Consumer spending increased 1.2%, down from 2.5% in the fourth quarter but above the 1.1% estimate.
April consumer sentiment numbers are due out from the University of Michigan at 10 a.m. ET. The weekly oil and gas rig count report is scheduled for a 1 p.m. ET release from BakerHughes (BHGE).
Dow Jones Stocks: Intel Warns
Intel tanked more than 9% at the open. Intel earnings and revenue inched up in its first quarter, narrowly topping analyst targets. Second-quarter guidance was well below expectations, however, and full-year earnings guidance missed views.
Intel stock had gained nearly 10% after initially clearing a 54.20 buy point on March 13. Friday's action implies Intel stock would open back below that buy point and below its 10-week moving average. Both are sell signals. Premarket moves do not always carry over into regular trade.
Amazon Leads FANG Stocks
E-commerce giant Amazon pared its early gain to 0.3%, while the rest of its FANG stock peers lost ground. Amazon earnings soared 117%, far above forecasts. The e-commerce and cloud-computing giant also reported a better-than-expected 17% revenue gain. The closely-watched Amazon Web Services unit reported a 41% rise in revenue, to $7.69 billion, with operating income of $2.2 billion.
The IBD Leaderboard stock is extended, ending Thursday up 9.6% so far for the week after topping a 1736.51 buy point in March.
Earnings News: LendingTree Breaks Out
Among companies reporting earnings early Friday, Ford spiked 9% and GrubHub climbed nearly 3% after their reports. Restaurant chain Bloomin' Brands (BLMN) scrambled more than 9% higher, and auto components maker Autoliv (ALV) added 2.4%
Online mortgage broker LendingTree (TREE) notched a 5.3% advance, as strong second-quarter and full-year guidance trumped mixed first-quarter results. The opening gain left LendingTree in a buy zone above a three weeks tight buy point at 373.01. The chanse zone extends to 391.66.
Nasdaq Leads In April; Growth Stocks Mid-Market
The Nasdaq ran up 1.5% for the week through Thursday, and has gained more than 5% so far in April. It is working on a fifth-straight weekly advance, but has run into some possible resistance right around the level of its prior high, at 8,133, from August.
The S&P 500 has climbed 0.7% for the week, and 3.2% since the start of the month.
The Dow Jones industrials slipped 0.4% for the week through Thursday, and hold a 2.1% gain thus far for April.
All three leading indexes have posted consistent monthly gains since the start of the year, and the confirmed stock market uptrend remains intact. Growth stocks have traded near the market's mid-range, with the Innovator IBD 50 ETF (FFTY) up 1.2% so far this week and showing a 2.4% gain since the start of April.
But indexes have been hesitant to break to new highs, possibly because of earnings season apprehension, or maybe due to underlying trade war or economic concerns. Friday's GDP data could potentially ease or add to those concerns.
For more detailed analysis of the current stock market and its confirmed uptrend, study the Big Picture.
A Tough Week In China; Japan Heads Into Holiday
In Japan, the Tokyo Stock Exchange's Nikkei 225 dipped 0.2%, ending with a 0.3% gain for the week as it shuts down through May 6 for a series of seasonal holidays. The index rose 5.2% in April.
China's Shanghai Composite tumbled 1.2% Friday, taking a 5.6% loss for the week — its worst decline since October. Increasing concerns over a potential hawkish turn in government stimulus policy has rattled China's markets. Shanghai will close Wednesday-through-Friday next week for China's Labor Day celebration. Hong Kong will close only on Wednesday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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