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US stocks eke out gains thanks to tech stocks

US stocks eked out gains on Thursday, propelled by tech stocks to counterweigh negative news about oil prices, Ford Motors and Atlanta Fed's growth forecast ahead of GDP numbers
Facebook turns up advertising, buoys tech sector
US stocks eked out gains on Thursday, propelled by tech stocks to counterweigh negative news about oil prices, Ford Motors (NYSE:F) and Atlanta Fed's growth forecast ahead of GDP numbers.
Markets remained jittery ahead of the key growth number for the US, the second quarter gross domestic product figure, which has the potential to put in the shade all the second quarter earnings that have been spewing out of Wall Street for more than a week. The GDP figure will be printed on Friday.
But stocks like Facebook (NASDAQ:FB), up 1.4% to $125 after reporting strong advertising growth with its earnings, powered the tech sector.
The market bellwether S&P 500 closed up 0.2% at 2,170 while the NASDAQ, where much of the action was centered, gained 0.3% to 5,154. Among the top gainers on the Nasdaq was Inc (NASDAQ:AMZN), up 2.2% at $752.61.
After hours, Amazon advanced a further 1.7% to $765.23. Amazon reported strong sales growth during the second quarter, with revenues rising to $30.4bn on the back of vigorous retail demand, up 31% from the same period a year ago.
Meanwhile, Alphabet (NASDAQ:GOOGL), the parent company for Google, shook off recent worries about a slowing in its advertising business as it reported its fastest growth rate in two years and revenues and earnings well ahead of analysts’ expectations.
The Google division registered a 21% jump in revenues to $21.5bn, compared with the 17% advance Wall Street had been expecting.
Google shares were up 6.25% to $813.74 after hours.
Proving that advertising was not only the province of new technology but also of old technology where an economy is growing, CBS (NYSE:CBS) blew away estimates in the second quarter as advertisers flocked back to broadcast television.
Broadcast television has staged a comeback as concerns have grown about cable television, with audiences “cutting the cord” in favour of online alternatives.
Revenues for the second quarter rose 2 per cent to $3.29bn — even though the prior period included the lucrative title fight between Floyd Mayweather Jr and Manny Pacquiao, which was shown on CBS’ pay TV channel Showtime. Net income rose from $332m to $423m.
Earnings per share rose almost 40 per cent to 93 cents a share. The consensus analyst estimate was 86 cents a share. However, CBS shares were down 0.2% at $54.10 after hours.
The S&P Midcap 400 gained 0.3% to 1,553 and was led by Tempur-Pedic International Inc (NYSE:TPX), up 16.8% to $74.04 after announcing solid second quarter earnings.
The S&P Smallcap 600, however, was unable to muster gains and ended down 0.3% at 742.
Ford reported poorly second quarter earnings while Atlanta Fed clipped its growth forecasts ahead of the official GDP numbers. Ford shares closed down 8.2% at $12.71.
The US oil benchmark West Texas Intermediate was down 2% at $41.07, its lowest level since mid-April.


US shares stretched over the line to post a modest gain in afternoon trading on Thursday, despite weaker oil prices, a downbeat motor outlook from industry behemoth Ford (NYSE:F) and depressed growth forecasts from the Atlanta Fed.
The market bellwether S&P 500 was up 0.1% at 2,169, having spent most of the session in negative territory.
The US oil benchmark West Texas Intermediate was down 1.8% at $41.15, its lowest level since mid-April and its sixth successive session of falls, as brokers at Goldman Sachs waded in with their latest prognosis of where oil prices are headed.
Although the dollar was downbeat on Thursday, Goldman Sachs said that a strong dollar deserves more blame for an oil price downturn than a gasoline glut. 
With the increased prospect of the US Federal Reserve raising interest rates oil prices could fall below $40 per barrel. Goldman said that while there is indeed a glut of gasoline, it won’t be responsible for further declines in oil prices because it is a supply-side and not a demand-side problem.
The S&P Midcap 400 was up 0.4% at 1,554, while the S&P Smallcap 600 was still to nurse itself back to gains, last seen down 0.2% at 743.
Ford Motor Company reported weaker-than-expected profit in the second quarter and declared that the US auto industry's long recovery was at an end, sending its stock and those of other auto companies tumbling.
Shares of General Motors Co (NYSE:GM) came off 3.4% to $30.94 as its market value fell about $1.7bln. NYSE:F="" rel="6188" shares="">NYSE:FCAU) dropped 4.5% to $6.40 following Ford's results. Ford itself lost 8.6% to $12.64.
Meanwhile, the Atlanta Fed, a regional branch of the US central bank, said it now expects the world’s biggest economy to have grown at a 1.8% clip in the second quarter. The estimate, which comes a day before the Commerce Department unveils official growth figures for the second quarter, compares with Street expectations of 2.6%, and growth of 1.1% in the first three months of 2016.


The dollar remained subdued as investors digested the Federal Reserve's statement along with a mixed bag of results before the bell this morning.

As expected the Fed held rates steady, but left investors guessing at future guidance on monetary policy.

The Dow Jones Industrial Average opened 63 points lower at 18,408.

The top winner was Travelers Company Inc (NYSE:TRV) up half a percentage point to 117.

The biggest loser was Boeing Co (NYSE:BA) down almost 2% to 133. Yesterday the aircraft builder reported the first loss in seven years.

Shares in Ford Motor (NYSE:F) dipped 8% after the car-maker reported a 9% drop in profits for the second quarter.

Whole Foods (NASDAQ:WFM) shares fell 6% following a downbeat outlook yesterday.

Nasdaq was flat on yesterday's close at 5,140.

A US$2bn quarterly profit managed to push Facebook (NASDAQ:FB) shares 3% higher.

Later today, Facebook's rival Alphabet (NASDAQ:GOOG) and online retailer Amazon (NASDAQ:AMZN) are due to release results.

Preview at 9.29am

US shares were set for a quiet start as investors mulled the Fed’s latest comments, Apple’s startling gain yesterday and Oracle’s bid for NetSuite.

Spread bet firms see the Dow Jones Industrial Average opening around thirty points lower at 18,472 as an interest rate rise now seems possible in September.

Last night, the US central bank indicated that risks to the economy had diminished, which some Fed watchers suggested meant action may be soon.

Rob Carnell, Chief International Economist at ING, said that the last time the Fed had remarked risks were diminishing was last October – the meeting before it hiked rates for the first time in a decade.

Elsewhere, the 6.5% rise in Apple’s (NASDAQ:APPL) share price Tuesday was generating plenty of attention as it was the second largest daily rise in the iPhone maker’s history.

The surge was sparked by better than expected quarterly results and hopes the iPhone may start to pick up again.

Pre-open earnings news was disappointing, with Ford (NYSE:F) and ConocoPhillips underwhelming their supporters though Facebook (NASDAQ:FB) was going well after it beat market forecasts.

Oracle(NYSE:ORCL), meanwhile, agreed to acquire business software group NetSuite (NYSE:N) for US$9.3bn or US$109 per share.  

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