Megacap earnings lift Nasdaq but fiscal uncertainty weighs

NEW YORK (Reuters) – The Nasdaq rose on Friday, lifted by strong earnings from some of the largest U.S. companies, but gains were curbed and the Dow and S&P lost ground as uncertainty about the government’s next round of coronavirus aid exacerbated economic worries.

Apple shares surged to reach a high of $413.33 and were last up 7.36% at $413.09 in the wake of blowout quarterly results and a four-for-one stock split announcement.

Amazon gained 3.73% after posting its biggest profit ever while Facebook jumped 7.76% after the social media giant blew past revenue expectations.

Google parent Alphabet Inc, however, fell 4.79%, and was among the biggest drags on the S&P 500 and Nasdaq, as it posted the first quarterly sales dip in its 16 years as a public company.

“It was all very exciting but the fact is the market is exhausted. It’s not falling out of bed, it’s not crashing, it is just churning,” said Ken Polcari, chief market strategist at SlateStone Wealth LLC in Jupiter, Florida.

The four companies are among the top five in market capitalization, representing roughly 20% of the S&P 500’s total, and Apple’s gain pushed it ahead of Saudi Aramco as the world’s most valuable public company, according to Refinitiv data.

(GRAPHIC: Apple briefly becomes world’s most valuable company – here)

Negotiations over coronavirus relief aid continued, but the White House and Democrats were not yet on a path toward reaching a deal according to House of Representatives Speaker Nancy Pelosi, hours before the expiration of a federal unemployment benefit.

“Some of that concern is absolutely because that deal hasn’t gotten done yet and when is it going to get done?” said Polcari.

The Dow Jones Industrial Average fell 186.59 points, or 0.71%, to 26,127.06, the S&P 500 lost 13.95 points, or 0.43%, to 3,232.27 and the Nasdaq Composite added 22.12 points, or 0.21%, to 10,609.94.

Deaths from COVID-19 appeared to be rising at their fastest rate since early June in the United States, while the epicenter of the pandemic showed signs of shifting to the Midwest.

The benchmark index is now about 4% shy of its February all-time high, but faltering macroeconomic data and rising COVID-19 cases in the U.S. are making investors cautious again.

Still, the S&P is on track for its fourth weekly gain in the past five and fourth straight month of gains as massive amounts of fiscal and monetary stimulus measures have helped support equities.

Energy stocks were the worst performing among the 11 major S&P sectors after Chevron Corp reported an $8.3 billion loss on asset writedowns and ExxonMobil Corp recorded a second consecutive quarterly loss.

Caterpillar Inc fell 3.09% after the bellwether for economic activity offered little signs of improvement in equipment sales.

Declining issues outnumbered advancing ones on the NYSE by a 2.50-to-1 ratio; on Nasdaq, a 2.82-to-1 ratio favored decliners.

The S&P 500 posted 25 new 52-week highs and no new lows; the Nasdaq Composite recorded 94 new highs and 20 new lows.

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