Avengers, FAANG Earnings, and Powell Remarks Take Week by Storm

Fed Chair Jerome Powell diminished hopes for a rate cut

Managing Editor
May 3, 2019 at 3:07 PM
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The week started off on a high note, with the Nasdaq Composite (IXIC) and S&P 500 Index (SPX) each touching a fresh record peak. The Dow Jones Industrial Average (DJI) also got a lift early in the week, thanks to a round of strong earnings from big-cap pharma stocks, with all three indexes marking a fourth straight monthly gain.

However, a lackluster earnings report from Google parent Alphabet (GOOGL), as well as comments from Fed Chair Jerome Powell, weighed on the major market indexes mid-week, even overshadowing a solid earnings showing from Apple (AAPL). As of this writing, stocks are battling to end the week in the black, as traders cheer a better-than-expected April jobs report and the lowest unemployment rate in nearly five decades. 

Big-Cap Earnings, "Avengers" Make Noise

A big driver for stocks early in the week were big-cap earnings, including Pfizer (PFE) and Merck (MRK). Restaurant chain McDonald's (MCD) also hit the ground running, after it shared a first-quarter earnings and sales beat. Another Dow name making headlines was Walt Disney (DIS), which saw impressive gains alongside AMC Entertainment (AMC) following a record-breaking weekend for the highly anticipated "Avengers: Endgame" movie.

FAANG Stocks Split After Earnings; Buffett Boosts AMZN

Moving onto FAANG stocks, Apple and Google parent Alphabet went in opposite directions after earnings. In addition, analysts weighed in on this Apple supplier, while calls were hot on Qualcomm (QCOM) ahead of its quarterly report. Meanwhile, Amazon.com (AMZN) shares soared on news that Warren Buffett's Berkshire Hathaway is amassing a stake, while one FAANG member emerged as one of the best stocks to own in May.

3 Stocks Sucker-Punched by FDA

Medical device maker Pulse Biosciences (PLSE) plummeted, after the firm received a request from the Food & Drug Administration (FDA) for more information on its skin-related procedure system, CellFX. Heron Therapeutics (HRTX) shares also tanked after an FDA denial, much to the delight of rival Pacira Biosciences (PCRX). Further, the FDA’s denial to approve Contepo sank shares of Nabriva Therapeutics (NBRV), dashing the hopes of NBRV option bulls.

Disney Earnings, Uber IPO Up Next

Looking ahead to next week, earnings from blue-chip Walt Disney will garner investor attention, as well as results from newly public Lyft (LYFT). Outside of the earnings confessional, investor will digest the latest batch of inflation data, and traders are also buzzing about the upcoming Uber (UBER) initial public offering (IPO), with the shares slated to debut next Friday, May 10.


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