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Market Recap
WEEK OF APR. 24 THROUGH APR. 28, 2023
The S&P 500 index edged up 0.9% this week as stronger-than-expected quarterly earnings boosted the communication services and technology sectors and helped the market benchmark end April with a monthly gain. The S&P 500 ended Friday's session at 4,169.48, up from last week's closing level of 4,133.52. With Friday marking the final session of April, the index locked in a monthly increase of 1.5% and is now up 8.6% for the year.
The week's slight gain came as better-than-expected Q1 financial results from some companies outweighed disappointing reports from others.
Economic data appeared to move in the right direction but had some caveats. Q1 gross domestic product showed the US economy expanded last quarter but only by 1.1%, which was much smaller than Q4's 2.6% expansion. The read missed expectations for a 2% growth rate. Year-over-year growth in the core personal consumption expenditure index slowed to a 4.6% rate in March from 4.7% in the previous month, but that remains well above the Federal Reserve's 2% target.
By sector, communication services had the largest percentage increase of the week, up 3.8%, followed by a 2.4% increase in technology. Real estate, consumer staples, energyand consumer discretionary also posted weekly gains.
In the red, meanwhile, utilities fell 1%, followed by declines of 0.6% each in industrials and health care. Financials and materials also declined.
The advance in communication services was led by shares of Facebook parent Meta Platforms (META), which jumped 13% on the week. The social network operator, which also owns Instagram and WhatsApp, reported Q1 results above Street consensus estimates and issued a stronger-than-expected revenue outlook for the current quarter.
The technology sector's climb was led by shares of Microsoft (MSFT), which rose 7.5% as the software company also reported stronger-than-expected quarterly results. Microsoft's fiscal Q3 earnings and revenue both topped Street views as its intelligent cloud segment's sales jumped.
On the downside, the utilities sector's decliners included shares of FirstEnergy (FE), which reported Q1 adjusted earnings per share a penny below the Street consensus estimate despite higher-than-expected revenue. The company also forecast Q2 EPS below the mean estimate of three analysts polled by Capital IQ. Shares slipped 2%.
The drop in industrials came as shares of Old Dominion Freight Line (ODFL) fell 8.2% amid weaker-than-expected Q1 earnings per share and revenue from the truckload shipping company. Also weighing on industrials, shares of United Parcel Service (UPS) slid 7.9% as the package delivery company reported Q1 results slightly below market expectations and trimmed its full-year revenue outlook.
In health care, shares of AbbVie (ABBV) shed 7% as the biopharmaceutical company reported Q1 adjusted earnings per share and revenue below analysts' mean estimates. While the company raised its guidance for full-year adjusted EPS, AbbVie said it is discontinuing its cystic fibrosis program as well as studies of its ABBV-154 treatment candidate in polymyalgia rheumatica and Crohn's disease.
Next week's earnings calendar features companies such as Pfizer (PFE), Advanced Micro Devices (AMD), Starbucks (SBUX), Apple (AAPL), Anheuser-Busch Inbev (BUD), ConocoPhillips (COP) and Berkshire Hathaway (BRK.A, BRK.B).
Economic data expected earlier next week include April manufacturing and service sector data from the Institute for Supply Management as well as March construction spending and factory orders and construction spending. However, investors will be most focused on a two-day meeting of the Federal Open Market Committee as well as April employment data. ADP is set to release April private sector employment numbers on Wednesday while the US Labor Department's April nonfarm payrolls and unemployment rate are due on Friday.
