US stocks drop as investors digest latest wave of corporate earnings
- US stocks opened lower on Friday as investors continue to digest a wave of corporate earnings.
- Apple reported strong first-quarter earnings, while Robinhood missed estimates and plunged.
- Strong economic growth in 2021 has been met with the highest inflation in decades, according to recent data.
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US stocks dropped on Friday, with the
Apple reported a record first-quarter revenue of $124 billion and said it expects solid year-over-year growth in 2022 as it continues to navigate supply chain disruptions. On the flip side,
Of the 31% of S&P 500 companies that have reported earnings so far, 81% are beating profit estimates by a median of 6%, while 75% are beating revenue estimates by a median of 4%, according to data from Fundstrat.
Here's where US indexes stood shortly after the 9:30 a.m. ET open on Friday:
- S&P 500: 4,316.67, down 0.23%
- Dow Jones Industrial Average: 33,985.12, down 0.51% (175.66 points)
- Nasdaq Composite: 13,343.56, down 0.7%
On top of corporate earnings, investors are questioning how recent economic data will impact the Federal Reserve's decision to raise interest rates and reduce its balance sheet. The economic data suggest the Fed will follow through with interest rate hikes beginning in March.
The US economy grew 5.7% in 2021, as measured by GDP, which was the fastest growth since 1984. But that growth has also led to rising inflation, with the personal consumption expenditures index up 5.8% in December, representing the fastest pace since 1982.
The surge in economic growth has led investors to reassess the growth and value trade over the past year. This has led to a convergence in performance between Berkshire Hathaway and Cathie Wood's Ark Invest, as disruptive innovation continues to sell-off amid rising interest rates.
Fidelity is set to launch two new ETFs to track the metaverse and the cryptocurrency sector, according to recent filings with the SEC.
The launch of a new ETF sporting the symbol "PUNK" is also seeking to invest in the metaverse, but it's excluding Meta Platforms, formerly known as Facebook, and is actively shorting it.
Gold fell as much as 0.52% to $1,783.80 per ounce. The yield on the 10-year Treasury rose less than 1 basis point to 1.83%.
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