The main Wall Street indexes finished the week on green territory after investors ignored the disappointing financial report of Intel and instead focused on the decision to temporarily resume the work of the federal government.
The US President Donald Trump said he had reached a deal with the Congress to lift the US administration’s paralysis. The Interim Agreement provides for government funding for three weeks until February 15.
The blue-chip index Dow Jones Industrial Average added 183.96 points to 24,737.20 points, registering growth for the fifth consecutive week. The broader index S&P 500 rose by 0.85% to reach 2,664.76 points. The Nasdaq Composite advanced by 1.29% to 7,164.86 points, and Starbucks’s stock rose on the background of its strong financial statement.
The growth of the main indexes was limited after Donald Trump made the official announcement as some traders were disappointed that a broader deal was not reached.
Two more topics added to the positive sentiment in Friday’s trade – the Federal Reserve’s monetary policy and trade talks with China.
Earlier, the Wall Street Journal reported that the Federal Reserve is closer than expected to the end of the reduction in the volume of bonds it holds on its balance sheet. The Fed’s position is important to investors who monitor the scope of the monetary policy tightening of the bank.
The Secretary of the Treasury Steven Mnuchin also gave impetus to the markets, expressing confidence in the trade talks between Washington and Beijing.
In the bond markets, the yields on 10-year and 30-year US government bonds rose to 2.755% and 3.06% respectively.
In the forex markets, the dollar index, which measures the value of US dollars against a basket of six major currencies, lost 0.87% of its value to a level of 95.76 points.
Corporate stocks performance
Apple, Amazon Alphabet and Facebook were the best-performing stocks during the trading session after investors regained their appetite for taking risks because of the end of paralysis and were buying shares of their favourite technology companies. Apple’s stock rose by nearly 3%.
The stocks of Intel depreciated by 7% after disappointing financial statement for the fourth quarter. However, the stocks of other chip makers were not affected.
The stocks of Starbucks rose by more than 4% after the company reported high sales and stable profit growth in its first quarter report of the new fiscal year (October-December).
Corporate earnings reports
Intel misses revenue targets and issues weak outlook amid record revenue. Overall, the company posted yet another full-year revenue record of 70.8 billion USD, but its fourth-quarter performance fell short of analyst projections. The company also presented lower-than-expected guidance for 2019. Despite missing its revenue targets, Intel still delivered impressive numbers given the environment. Estimates had pegged Intel’s overall revenue at about 19 billion USD, leading to a slump in after-hours trading, but the firm’s Q4 revenue of 18.7 billion USD represents a 9% YoY increase, much of that coming on the back of its data-centric businesses that notched a solid 9% YoY gain. The company also reported a 10% YoY revenue increase in the PC-centric business, but much of those gains came from modem sales. Overall, PC volumes declined 2% on the year, which isn’t surprising given the ongoing processor shortages.
The coffee chain Starbucks reported net income of 760.6 million USD or 61 cents per share. The company said it earned 75 cents per share on a non-GAAP basis. After stripping out a 7-cent gain from income tax items, Starbucks earned 68 cents per share, topping analysts’ estimates of 65 cents per share. The coffee giant said revenue rose by 9% to 6.63 billion USD, beating estimates of 6.49 billion USD for the quarter.