S&P 500 Rides Apple Rally Higher as Tech Fights Back

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Investing.com – The S&P 500 rallied Friday, as blowout quarterly results from Apple put tech back into the driving seat following a recent rout amid jitters about a faster pace of U.S. Fed rate hikes. 

The S&P 500 rose 1.1%, the Dow Jones Industrial Average gained 0.56%, or 189 points, the Nasdaq jumped 1.6%.

Apple (NASDAQ:AAPL) rose more than 5% after reporting quarterly results that topped analysts’ estimates following better-than-expected iPhone sales despite a drag from supply-chain issues.

The tech giant also said it expected supply-chain problems to improve, boosting sentiment on broader tech stocks.

“[Tim] Cook is calling out some supply chain improvement for the March quarter which are ‘calming words heard around the tech world’ and much needed good news in what has been a market storm to start 2022,” Wedbush said in a note.

Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL) Amazon (NASDAQ:AMZN),  and Microsoft  (NASDAQ:MSFT) were more than 1% higher.

As well as bullish earnings, tech was also helped by a fall in U.S. bond yields following economic data showing inflation continues to gather steam at a time when the consumer has pulled back on spending.

Consumer spending fell 0.6% in December, representing the largest monthly decline since February. The slowdown in spending, however, was largely attributed to the impact of the omicron variant.

“Spending was hit hard by a combination of the Omicron hit to discretionary services and people’s willingness to visit malls, alongside a void left by earlier-than-usual holiday shopping, triggered by fears of shortages of popular items,” according to Pantheon Macroeconomics.

The core personal consumption expenditures price index, the Fed’s preferred gauge of inflation, rose by 4.9% the fastest pace since 1983.

Visa (NYSE:V) was also a big gainer on the day, after delivering fiscal first-quarter earnings and revenue that topped Wall Street estimates as stronger cross border payment volumes bolstered growth.

“After sentiment shifted away from established payment companies, Visa’s relative valuation/growth presents a significant buying opportunity for investors focused on sustainable growth,” Oppenheimer said in a note.

Robinhood Markets (NASDAQ:HOOD), meanwhile, delivered disappointing guidance on revenue for its fiscal first-quarter after users fell in the fourth quarter, but the shares of the trading platform pared losses to trade more than 4% higher.  

Energy proved an exception to the rally, weighed down by a more than 3% decline in Chevron (NYSE:CVX) after the oil major reported quarterly results that missed on the bottom line.

Caterpillar (NYSE:CAT), a Dow index bellwether, was also nursing losses of more than 5% as better-than-expected quarterly results were overshadowed by a fall in margins as supply-chain woes drove up costs.