US Stock Market Overview – Tech Stocks Surge as Google Leads Nasdaq Higher
Stocks surged higher on Friday, led by a rally in the technology space. Stronger than expected earnings from Alphabet lifted the entire Nasdaq. Most sectors in the S&P 500 index were higher, led by financials and technology, energy bucked the trend.
Google shares surged on better than expected earnings rising nearly 10%. Earnings per share came in at $14.21 per share, ex-items, vs. $11.30 per share expected. Revenue: $38.94 billion, versus expectations of $38.15 billion. Traffic acquisition costs came in at $7.24 billion, versus expectation of $7.27 billion. Paid clicks on Google properties from Q2 2018 to Q2 2019. Google reported advertising revenue of $32.6 billion for the Q2, compared to $28.09 billion during the same period last year. Google’s other revenue, which includes hardware like its Pixel phones and cloud products, came in at $6.18 billion compared to $4.43 billion during last year’s quarter.
Intel Sells Modem Business to Apple
Intel Corp. reported stronger than expected earnings and said it would sell a majority of its smartphone-modem chip business to Apple for $1 billion. Apple will acquire smartphone modem operations from Intel as well as a portfolio of patents and about 2,200 staff members. At completion, it will be Apple’s second largest acquisition after the 2014 purchase of Beats Electronics LLC for $3 billion. Intel made the Apple deal announcement as it reported a 17% drop in second-quarter profit, driven by weaker demand in China where business spending on technology has slowed amid trade tensions with the U.S. The chip maker, the largest in the U.S. in terms of revenue, said its earnings fell to $4.2 billionor 92 cents a share, down from $1.04 a share in the year-earlier quarter. Intel sales retreated 3% to $16.5 billion. Analysts were expecting $15.67 billion in sales.
GDP Beats Expectations
US Growth decelerated in the Q2, but not by as much as expected, as tariffs and a global slowdown weighed on the U.S. economy. The Commerce Department Reported that US GDP increased by increased 2.1%, down from the first quarter’s 3.1% and the weakest increase since Q1 of 2017. Expectations had been for US GDP to increase by 1.8%. The underlying numbers in the report seemed to take steam out of the recession fears that have been much of the talk among economists and policymakers at the Federal Reserve.