Apple reported quarterly earnings that topped analyst expectations, but its revenue growth remained flat on a year-over-year basis. It also did not offer guidance for the quarter ending in June amid uncertainty over the coronavirus outbreak. The tech giant’s stock gained 1.3%.
Both Apple and Amazon are among the companies that led the S&P 500’s comeback from the late-March lows and were two of the best performers in April. Amazon rallied nearly 27% in April while Apple jumped 15.3%.
Wall Street was coming off its biggest monthly surge in over 30 years, with the S&P 500 gaining 12.7% while the Dow advanced 11.1%. It was the third-biggest monthly gain for the S&P 500 since World War II. The Dow had its fourth-largest post-war monthly rally and its best month in 33 years.
The Nasdaq Composite closed 15.5% higher for April, logging in its biggest one-month gain since June 2000.
Investors pointed to both the slide in Amazon equity and an opportunity to take profits after a strong April for the downward pressure on Friday.
“A historically strong April in markets ended on a down note as more soft economic data offset fading optimism for coronavirus treatments while earnings were mixed,” wrote Tom Essaye of the Sevens Report. Stocks “are sharply lower mostly on continuation from yesterday’s selling as markets digest the recent rally, although AAPL & AMZN earnings were mildly disappointing.”
Those gains were partly driven by hopes of reopening the economy sooner than expected.
Stocks that would benefit most from that reopening jumped at the end of March, including Carnival Corp, MGM Resorts and Kohl’s. However, those shares all fell Friday, down 4%, 6% and 1.1%, respectively.
Hope for a potential treatment for the coronavirus has also helped the market make a comeback. Earlier in the week, Gilead Sciences said a study of its remdesivir drug conducted by the National Institute of Allergy and Infectious Diseases met its primary endpoint.
The number of new infections around the world has also fallen in recent weeks, leading some countries and U.S. states to slowly reopen their economies.
But Phillip Colmar and Santiago Espinosa, strategists at MRB Partners, urged investors to remain cautious.
“The sharp relief rally in equities has now moved ahead of underlying fundamentals, leaving room for near-term disappointments,” they said in a note to clients. “Many authorities are looking to reopen their economies but doing so safely and to near previous output levels will require a series of medical breakthroughs and widespread distribution of the treatment.”
More than 3.2 million virus cases have been confirmed globally, according to Johns Hopkins University, with over 1 million infections in the U.S. alone.
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