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Traders in the OEX pit at the Chicago Board Options Exchange climb the walls of the pit in their scramble to make trades 18 April 2001 in Chicago, Illinois, at the moment news hits that the Federal Reserve has made an unexpected half-point cut in interest rates. A
Wall Street also digested key earnings from companies like Amazon, Merck and Exxon Mobil. On Thursday, Amazon reported better-than-expected earnings and revenue for the fourth quarter. However, the company issued weaker-than-expected revenue guidance for the first quarter and warned about increasing investments. These concerns pushed Amazon shares down by 5.38 percent.
Merck, meanwhile, posted a better-than-expected profit and revenue, sending its shares up by 2.7 percent. Exxon Mobil shares rose 3.6 percent after the company reported better-than-expected earnings. Chevron also gained 3.2 percent on a stronger-than-forecast profit.
“The word I’m using to describe this earnings season is reassuring,” said Kate Warne, investment strategist at Edward Jones. The reaction to the earnings “is very good because it reflects that investors were more worried than the numbers reflected and companies are being rewarded” for posting better-than-expected results.
So far, more than 45 percent of S&P 500 have reported earnings this season. Of those companies, 68.1 percent have topped analyst expectations, according to FactSet.
“It’s been pleasantly surprising for us,” said JJ Kinahan, chief market strategist at TD Ameritrade. “We would have expected the tariff situation to weigh a little bit more than what it did, but I think the way that it weighed in was in what was unsaid than what was said. We did not hear any CEOs, so far at least, talk about capex spending. That goes back to the uncertainty around tariffs.”
Wall Street also kept an eye on trade talks between China and the United States. Both negotiating teams have said they made “important progress.” President Donald Trump also said he would soon meet with Chinese President Xi Jinping to try to reach a comprehensive trade deal. Stocks had taken heart from the possibility of top-level trade talks over the coming weeks, but the upbeat mood soon cooled when the White House insisted it sees March 1 as a hard deadline for a deal.
The moves Friday come after Wall Street posted its biggest January gain since 1987 in the previous session. Strong earnings and an indication from the Federal Reserve that it will pause rate hikes boosted investor confidence. The S&P 500 ended January up more than 7 percent.
Gains in January usually translate into a positive year for stocks. Since 1950, the S&P 500 has ended a calendar year higher 87 percent of the time when January ends up being a positive month, according to the Stock Trader’s Almanac.
—CNBC’s Silvia Amaro and Sam Meredith contributed to this article.
from Viral News Reports http://bit.ly/2MIBaTp
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