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U.S. equities post weekly gains amid earnings, economic data

New York, U.S. | Xinhua | U.S. stocks advanced for the week as Wall Street assessed a batch of earnings reports and economic data.

For the week ending Friday, the Dow gained 0.4 percent, the S&P 500 rose 1.3 percent and the tech-heavy Nasdaq Composite advanced 2.7 percent. For October, the Dow climbed 5.8 percent, while the S&P 500 and the Nasdaq jumped 6.9 percent and 7.3 percent, respectively.

The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly decline of 6.2 percent.

The above market moves came as earnings season continued to deliver this week, including results from several high-profile companies. Earnings from tech heavyweights presented a mixed picture.

Apple reported its fiscal fourth quarter results after the closing bell on Thursday, missing analysts’ expectations on revenue, and its executives warned of ongoing supply-chain problems.

Also on Thursday, Amazon reported third-quarter results, missing on the top and bottom lines.

U.S. social media giant Facebook reported mixed third quarter earnings, which saw earnings top expectations and revenue miss estimates.

Microsoft reported fiscal first-quarter earnings that exceeded analysts’ estimates.

Google parent Alphabet reported third-quarter results after Tuesday’s close that exceeded Wall Street’s expectations as the company saw a resurgence in its search business with travel activity ramping back up.

On other earnings, aircraft maker Boeing posted third-quarter results that missed analysts’ projections. Energy giants Exxon Mobil and Chevron delivered better-than-anticipated earnings. U.S. financial services company Robinhood reported a huge revenue miss for the third quarter.

About half of the S&P 500 have reported quarterly earnings and by the end of next week, 90 percent of the index will have released results, according to figures from The Earnings Scout, a macroeconomic research firm that specializes in corporate earnings trends.

The start of the third quarter earnings season has been confirming that the pace of earnings growth has been moderating, which “was to be expected given the unusually strong second quarter, along with headwinds from supply chain disruptions, rising energy costs, and a renewed wave of COVID-19 infections,” analysts at UBS said Monday in a note, adding there are “encouraging signs within the detail of the results that supports our positive stance on equities.”

“It looks like earnings per share (EPS) growth will exceed our 30 percent estimate for the quarter. This week almost 50 percent of the S&P 500 market cap will report. We maintain our 2021 S&P 500 EPS estimate of 45 percent growth and our 2022 estimate of 10 percent growth,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

On the economic front, U.S. personal consumption expenditures (PCE) increased 0.6 percent in September, the Department of Commerce reported on Friday.

The 12-month increase in the PCE index, the Federal Reserve’s closely-watched inflation measure, rose to 4.4 percent in September from 4.2 percent in the prior month, well above the Fed’s 2-percent annual target rate.

U.S. Commerce Department reported on Thursday that U.S. GDP rose only 2 percent in the third quarter, down from 6.7 percent growth in the second quarter.

U.S. Department of Labor said U.S. initial jobless claims, a rough way to measure layoffs, stood at 281,000 for the week ending Oct. 23, a decrease of 10,000 from the previous week’s revised level of 291,000. Economists polled by The Wall Street Journal had predicted new claims would decline to a seasonally adjusted 289,000.

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Xinhua

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