Facebook and Microsoft Keep NASDAQ in the Green

It was a classic earnings season session on Thursday with the major indices ending mixed as they digest new data and wait for the next round to come.

The NASDAQ flirted with setting another new high today but fell just short, though it was the only major index to finish in the green. It was up 0.21% to 8118.68.

We can thank Facebook and Microsoft for the positive showing. These tech giants both reported solid quarters after the bell on Wednesday, so we knew they’d have a part to play in today’s action. Facebook ended higher by 5.85% while Microsoft rose 3.31% and briefly became one of the few $1 trillion companies.

The NASDAQ and the S&P both closed at all-time highs on Tuesday and have cleared out a space just below those levels in the past two days. The S&P looked like it might attempt more history on Thursday and spent most of the session on the plus side. But a late dip left it with a slight loss of 0.04% to 2926.17.

The Dow never had a chance in the session since 3M kicked it right in the gut this morning and wouldn’t let it get up. The index slipped 0.51% (or nearly 135 points) to 26,462.08. However, it was strong enough to come well off its low of the day at nearly 300 points.

Just when the market is breathing a little easier amid a better-than-feared earnings season, a manufacturing conglomerate like 3M has to miss quarterly expectations. Even worse, it cut its outlook for the full year. Shares plunged by nearly 13%. Fortunately, the market didn’t overreact, though it does remind us that there’s still half of earnings season to go.

While we’re on the subject of more earnings, Amazon reported after the bell and soared past earnings expectations. Revenue could only muster a match as the top line has been under pressure of late. Shares are up a little more than 1% afterhours, as of this writing. However, Intel stock is off more than 7% afterhours due to a soft earnings outlook.

On Friday, we’ll see how much of an impact Amazon will have on the market. Plus, first-quarter GDP will be released. If we get good reports and good data, then we may be able to go into the weekend with new highs! Fingers crossed…

Today's Portfolio Highlights:

Surprise Trader:
The tech companies are talking a lot about their cloud businesses in their earnings reports this week, so Dave got in on the game by adding Upland Software (UPLD) on Thursday with a 12.5% allocation. This Zacks Rank #1 (Strong Buy) provides cloud-based enterprise work management software. It reports after the bell on May 2 and analysts are expecting 52 cents. If it makes good on the estimate, then UPLD would have grown earnings and sales by 40.5% and 52.6%, respectively, year over year. The editor also likes that estimates are being hiked for next quarter. Read the complete commentary for more on this new addition. 

Income Investor: "The Commerce Department released strong durable goods numbers for March today, with orders rising 2.7% to a seasonally adjusted $258.42 billion.

"This was much faster than expected, and last month’s solid performance can be attributed to an increase in civilian and defense-related aircraft orders.

"Tomorrow, make sure to keep an eye out for U.S. GDP data for the first three months of 2019. The report is expected to show growth of 2%, which would be a strong showing after a rocky start to the year for the financial markets."
-- Maddy Johnson

Counterstrike: "After the bell, Amazon reported a big beat, but was trading up only slightly due to a softer guidance. Intel was down pretty big on a miss and will likely hurt the semis tomorrow.

"On top of earnings, we will get first quarter GDP in the morning. We are expecting to see a 2.2% print, which should be right in the ballpark. As long as the number comes in close to inline, GDP should have little effect on the market ahead of Amazon. Below $1900, the market will likely sell off, while over $1950 would be bullish.

"Amazon is the key tomorrow. We could get some selling under $1900, but the earnings look good. I’m typing this before the conference call, so anything goes. However, I think this stock will likely be very choppy over the next 24 hours of trading."
-- Jeremy Mullin

All the Best,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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