The S&P 500 index edged up 0.9% this week as stronger-than-expected quarterly earnings boosted the communication services and technology sectors and helped the market benchmark end April with a monthly gain.
With Friday marking the final session of April, the index locked in a monthly increase of 1.5% and is now up 8.6% for the year.
The week’s slight gain came as better-than-expected Q1 financial results from some companies outweighed disappointing reports from others.
Economic data appeared to move in the right direction but had some caveats. Q1 gross domestic product showed the US economy expanded last quarter, but only by 1.1%, which was much smaller than Q4’s 2.6% expansion. The read missed expectations for a 2% growth rate. Year-over-year growth in the core personal consumption expenditure index slowed to a 4.6% rate in March from 4.7% in the previous month, but that remains well above the Federal Reserve’s 2% target.
By sector, communication services had the largest percentage increase of the week, up 3.8%, followed by a 2.4% increase in technology. Real estate, consumer staples, energy and consumer discretionary also posted weekly gains.
In the red, meanwhile, utilities fell 1%, followed by declines of 0.6% each in industrials and health care. Financials and materials also declined.
This week’s earnings calendar features companies such as Pfizer (PFE), Advanced Micro Devices (AMD), Starbucks (SBUX), Apple (AAPL), Anheuser-Busch Inbev (BUD), ConocoPhillips (COP) and Berkshire Hathaway (BRK.A, BRK.B).
Economic data expected earlier this week include April manufacturing and service sector data from the Institute for Supply Management as well as March construction spending and factory orders and construction spending. However, investors will be most focused on a two-day meeting of the Federal Open Market Committee as well as April employment data. ADP is set to release April private sector employment numbers on Wednesday while the US Labor Department’s April nonfarm payrolls and unemployment rate are due on Friday.
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