Main U.S. Benchmarks Ends Higher
The U.S. stock market opened higher on Thursday and succeeded in managing these gains for the duration of the trading session. At the closing bell, the Dow Jones Industrial Average went up by 238.51 points (+0.99%) while the Nasdaq Composite Index advanced by 114.94 points (+1.64%). The broader S&P 500 Index was up 27.54 points (+1.04%).
Advancers outpaced decliners as market breadth showed widespread buying. Most of the major equity sectors moved higher, with technology and healthcare stocks leading the way. However, telecom stocks moved lower.
Market sentiment was lifted by the earnings reports of companies. The majority delivered good results over the past 24 hours and their stocks traded higher. Some of the prominent names are Amazon.com Inc. (AMZN), Chevron (CVX), Exxon (XOM), Facebook Inc. (FB), and United Parcel Service (UPS).
Weak Consumer Spending Hinders Growth of U.S. Economy
During the first quarter of 2018, the U.S. economy is seen to slow down due to the weak consumer spending. However, views the hindrance as temporary given the tight labor market and large fiscal stimulus.
Gross Domestic Product (GDP) is expected to at an annual rate of 2.0% based on the Reuters survey results conducted on economists. The growth is also affected by moderate business spending on equipment. There’s also the widening of the trade deficit and investment decline in homebuilding. A snapshot of the first-quarter GDP will be presented by the government on Friday.
Amazon Doubles Profit in the 1st Quarter
Amazon.com Inc. (AMZN), the world’s biggest online retailer, reported on Thursday that it more than doubled its profit during the first quarter of 2018. The company also predicts strong spring results. Quarterly sales increased by 43% to $51.0 billion which was above Wall Street’s estimate of $49.8 billion.
The impressive results only showed the broad strength of Amazon. The company has drawn the ire of U.S. President Donald Trump particularly on the business of shipping packages.
Meanwhile, the company also announced on Thursday that effective May 11, the price for U.S. Prime subscribers will increase from $99 to $119 per year. Amazon said the increase will come with improved and additional features like U.S. football games and cloud services for business.
Amazon’s service had only 20 million products available for two-day shipping some four years ago. Currently, that number is more than 100 million.
The price of AMZN zoomed up by 7% to a new record high in after-hours trade, adding $8 billion to the net worth of its chief executive and largest shareholder Jeff Bezos.
T-Mobile Makes Progress in Talks with Sprint
Two major U.S. wireless carriers might strike a deal as early next week. The talks between T-Mobile US Inc. (TMUS) and Sprint Corp. (S) appear headed for a positive outcome in negotiating merger terms.
The merger translates to a solid base of more than 127 million customers. Also, it could create a more formidable challenger for the No.1 and No.2 wireless players, Verizon Communications Inc. (VZ) and AT&T Inc. (T). The race to expand offerings in 5G, the next generation of wireless technology, is heating up.
According to sources, T-Mobile majority-owner Deutsche Telekom and Japan’s SoftBank Group Corp., which controls Sprint, are working on an arrangement that would stipulate how they exercise voting control over the combined company.
North & South Korean Leaders Meet in Historic Summit
On Friday, North Korean leader Kim Jong Un was full of emotion while crossing the dividing line. South Korean President Moon Jae-in was waiting to shake his hand.
This is the first summit for the two Koreas in over a decade. The two leaders met at the heavily fortified demilitarized zone between the countries. The dramatic meeting aims to end the decades-long conflict between the two sides. This can be the prelude to the Korean peninsula summit with U.S. President Donald Trump.
Prior to the meeting, Kim Jong Un said, “We are at a starting line today, where a new history of peace, prosperity and inter-Korean relations is being written.” He also told Moon that they should meet “more often” in the future.