U.S. stocks made up for a shaky week with a strong finish Friday as Apple led a rally in technology companies. The tech giant hit an all-time high after Warren Buffett said he’d made another big investment.
Stocks got off to a mixed start after trade talks between the U.S. and China ended with few signs of progress. The April jobs report showed that hiring continued at a solid clip and wages continued to grow at a slow pace. Apple surged after Buffett said Berkshire Hathaway bought 75 million shares during the first quarter.
Alphabet, Cisco Systems and other technology companies rose, and retailers, banks, and household goods makers also rallied. Investors also cheered strong first-quarter results from companies including Shake Shack and Activision Blizzard.
“We went into this earnings season with very high expectations,” said Quincy Krosby, chief markets strategist for Prudential Financial. “When you go in with such high expectations, you expect near perfection.”
The S&P 500 index climbed 33.69 points, or 1.3 percent, to 2,663.42. The Dow Jones industrial average rose 332.36 points, or 1.4 percent, to 24,262.51. The Nasdaq composite jumped 121.47 points, or 1.7 percent, to 7,209.62. The Russell 2000 index of smaller-company stocks gained 19.05 points, or 1.2 percent, to 1,565.60.
Overall, stocks have taken small losses in choppy trading over the last two weeks. But for Apple, this was the best week in six and a half years.
Apple rose 3.9 percent to $183.83 after Warren Buffett told CNBC his company boosted its investment in Apple to more than 240 million shares altogether. Buffett told CNBC about the purchase ahead of Berkshire Hathaway’s annual meeting this weekend. Berkshire stock rose 2.1 percent to $195.64.
Apple climbed 13.3 percent for the week after it reported solid quarterly results and investors were pleased with its forecast of solid iPhone sales, which came as a relief. It also raised its dividend and announced a big stock repurchase.
Companies have done well in the first quarter, but stocks haven’t necessarily followed suit as investors worried about the U.S.-China trade spat, rising interest rates, and other issues. But on Friday investors responded.
After better-than-expected reports, burger chain Shake Shack surged 18 percent to $55.95 while music streaming company Pandora Media advanced 19.8 percent to $6.89. Video game maker Activision Blizzard gained 4.5 percent to $69.84. The stock had dipped Thursday afternoon after Activision’s results were released early.
U.S. employers stepped up hiring modestly in April, and the hiring estimate from March was revised higher. That’s evident the economy remains resilient even though some businesses are concerned about a possible trade war. While many employers say it’s difficult to find qualified workers, they have yet to significantly boost pay in most industries, a trend that continued last month.
“That may not be good for Main Street, but it’s what Wall Street wanted to see,” said Krosby, of Prudential.
The Trump administration asked China to reduce its trade deficit with the U.S. by $200 billion by the end of 2020, striking an assertive stance in talks aimed at averting a trade war between the world’s largest economies. It also wants China to immediately stop providing subsidies to certain industries listed in a key industrial plan and end some of its policies related to technology transfers, a key source of tension underlying the dispute. While the trade tensions have rattled investors, many market watchers think the two sides will eventually come to a deal that doesn’t disrupt trade much.
Engineering and construction company Fluor plunged after it slashed its profit forecast because a gas-fired power project suffered “continued challenges.” The company took an unexpected loss in the first quarter and now expects a profit of $2.10 to $2.50 per share for the year, down from 2$3.10 to $3.50 per share. The stock dropped 22.4 percent to $45.76.
Bond prices rose early, but later gave up that gain. The yield on the 2-year Treasury note rose to 2.49 percent from 2.48 percent. The yield on the 10-year Treasury note remained at 2.95 percent. That helped banks recover from an early loss. Lower bond yields mean lower rates for mortgages and other types of loans, which reduces profits for banks. Companies that pay big dividends didn’t rise as much as the rest of the market.
Benchmark U.S. crude rose 1.9 percent to $69.72 per barrel in New York. Brent crude, the international standard, gained 1.7 percent to $74.87 per barrel in London.
Wholesale gasoline jumped 1.3 percent to $2.11 a gallon. Heating oil climbed 2 percent to $2.15 a gallon. Natural gas lost 0.6 percent to $2.71 per 1,000 cubic feet.
Gold gained 0.2 percent to $1,314.70 an ounce. Silver added 0.4 percent to $16.52 an ounce. Copper rose 0.2 percent to $3.09 a pound.
The dollar fell to 109.11 yen from 109.73 yen. The euro fell to $1.1962 from $1.1993.
Britain’s FTSE 100 rose 0.9 percent and the DAX in Germany added 1 percent. France’s CAC 40 gained 0.3 percent. The South Korean Kospi sank 1 percent and Hong Kong’s Hang Seng index lost 1.3 percent. Markets in Japan remained closed for a public holiday.
