Stocks On Wall Street Accelerated Gains, GDP Growth Decelerated

Barry Adams
27 Apr, 2023
New York City

Stocks advanced in early trading after Facebook parent reported revenue growth for the first time in about a year. 

Benchmark indexes jumped in cautious trading and tech stocks led the gainers after Metal Platforms reported increase in revenue and daily users across all sites. 

Investors were encouraged after the online company reported its first increase in advertising revenue in about a year, indicating a stable environment for revenue in the coming months. 

Market gains were muted after GDP growth slowed sharply in the first quarter, raising the prospect of a broader slowdown in the economy. 

 

Sharp Deceleration In US GDP Growth 

U.S. real gross domestic product increased at an annual rate of 1.1% in the first quarter, slower than the 2.6% rate in the final quarter of 2022, the Bureau of Economic Analysis reported Thursday. 

Increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment were partly offset by decreases in private inventory investment and residential fixed investment. 

Higher imports also weighed negatively on the final growth calculation. 

 

Indexes & Yields 

The S&P 500 index increased 0.8% to 4,088.60 and the Nasdaq Composite index advanced 0.9% to 11,968.01. 

The yield on 2-year Treasury notes inched lower to 4.01%, 10-year Treasury notes rose to 3.48% and 30-year Treasury bonds held at 3.74%. 

Crude oil fell 46 cents to $74.73 a barrel and natural gas prices eased a fraction to $2.28 a thermal unit. 

 

Stock Movers 

Meta Platforms Inc increased 13.5% to $209.30 after the parent of Facebook reported better-than-expected revenue. 

Revenue in the March quarter increased 3% to $28.6 billion and net income dropped 24% to $5.7 billion from $7.5 billion and diluted earnings per share fell to $2.20 from $2.72 a year ago. 

Facebook daily active users increased 4% to 2.04 billion and across all sites including Instagram and WhatsApp rose 5% to 3.02 billion. 

In the first quarter, ad impressions delivered across all apps  increased 26% and the average price per ad decreased 17% from a year ago.

Meta Platforms repurchased $9.22 billion of Class A common stock in the first quarter and the company had $41.73 billion available and authorized for repurchases. 

STMicroelectronics NV declined 4.2% to €40.45 after the Switzerland-based advanced electronics  company announced quarterly results ahead of market expectations.

The company said revenue in the first quarter increased 19.8% to $4.2 billion and net income soared 39.8% to $1.04 billion from $747 million and diluted earnings per share increased to $1.10 from 79 cents a year ago.

The company forecasted second quarter revenue of $4.28 billion with a band of $350 million, a sequential increase of 0.8%, and gross margin of 49.0% with a band of 200 basis points.  

American Airlines Group increased 1.5% to $12.93 after the international airline reported mixed quarterly results. 

Revenue in the first quarter increased 37% to $12.2 billion and the company swung to a net income of $10 million from a loss of $1.6 billion and diluted earnings per share was 2 cents compared to ($2.52) a year ago. 

Southwest Airlines Co declined 4.7% to $29.44 after the regional airlines reported wider loss in the first quarter following a negative revenue impact after the late December scheduling crisis that led to the cancellation of 16,000 flights. 

Revenue in the first quarter increased 21.6% to $5.7 billion from $4.7 billion and net loss shrank to $159 million from $278 million and diluted loss per share shrank to 27 cents from 47 cents a year ago. 

Teladoc Health Inc rose 5% to $27.02 after the telehealth platform operator lifted its revenue and adjusted earnings outlook for the year. 

Revenue in the first quarter increased 11% to $629.2 million and net loss in the quarter dropped to $69 million from $6.7 billion and diluted loss per share fell to 42 cents to $41.58 a year ago.  

In the first quarter of 2022, the company recorded a goodwill impairment charge of $6.6 billion. 

The telemedicine company forecasted second quarter revenue between $635 million and $660 million and between $2.575 billion and $2.675 billion in the full-year 2023. 

The company also estimated adjusted operating earnings between $60 million and $68 million in the second quarter and between $285 million and $325 million in the full-year 2023.