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Apr 26, 4:21 PM EDT

Facebook and other big tech stocks rally as US indexes climb


AP Photo
AP Photo/Richard Drew

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NEW YORK (AP) -- U.S. stocks are climbing Thursday as Facebook leads a rally by technology companies. The social media platform jumped after its recent data privacy scandal didn't appear to affect business in the first quarter. Retailers rallied as well. The market moved higher and interest rates decreased after a government survey showed business investment decreased in March, which might discourage the Federal Reserve from raising interest rates faster than investors would like.

KEEPING SCORE: The S&P 500 index jumped 34 points, or 1.3 percent, to 2,674 as of 2:55 p.m. Eastern time. The Dow Jones industrial average added 292 points, or 1.2 percent, to 24,376. The Nasdaq composite advanced 133 points, or 1.9 percent, to 7,137.

Three months ago the S&P 500 and Dow reached all-time highs. The indexes had been setting records regularly for the previous year and a half. But over the last three months, the market has been hit by worries about rising inflation and a potential trade war between the U.S. and China. The S&P is down 6.9 percent since Jan. 26 and the Dow has slumped 8.4 percent.

The Russell 2000 index of smaller-company stocks added 11 points, or 0.7 percent, to 1,561.

HAPPY FACE: Facebook surged 9.7 percent to $175.26 after the company's advertisers appeared to shrug off the privacy scandal that has surrounded the company. Facebook said its revenue jumped and there were few signs users or advertisers were abandoning the company since the scandal broke in mid-March. Facebook has faced a backlash about how it collects and uses data since the revelation that Cambridge Analytica, a data mining firm linked to the Trump campaign, had gained information on up to 87 million of its users. Facebook stock is down 5.3 percent since then.

Twitter gained 3.1 percent to $30.68. Alphabet, Google's parent company and the only digital publisher larger than Facebook, rose 2.3 percent to $1,046.55.

THE QUOTE: The rally came after the Commerce Department said an important measurement of business investment fell in March, the third decline in the last four months. Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute, said investors were happy to see that because it might encourage the Federal Reserve to raise interest rates at a slower clip.

"To me the biggest risk (to the market) is the Fed, and the Fed hiking rates too much given at least the level of economic growth we expect," he said.

RALLY CAPS: Other big technology companies like Microsoft also climbed. Online retailer Amazon soared 3 percent to $1,504.21. Retailers and companies that make goods for consumers also climbed. Chipotle Mexican Grill climbed after the company said sales improved in the first quarter, raising hopes that the chain is on the road to recovery after repeated food safety scares. The shares rose 24.2 percent to $421.79. They traded as high as $749 in mid-2015.

Auto parts seller O'Reilly Automotive jumped 12.6 percent to $256.39 after it topped analyst projections for the first quarter of the year. Ford rose 3.1 percent to $11.45 after it said it will stop marketing most of its car lines in North America as part of a major cost-cutting effort.

Wren said that big name technology and consumer-focused stocks have struggled since the market reached its recent highs, but they should continue to do well.

"This cycle isn't over and technology and the consumer discretionary sector are going to continue to participate in the upside over the balance of this cycle," he said.

BUSY SIGNAL: AT&T fell 5.2 percent to $33.37 after its profit and revenue fell short of Wall Street estimates, and analysts said its video business struggled. E-commerce company eBay slid 5.2 percent to $38.84 after its first-quarter sales and second-quarter forecast disappointed Wall Street.

ENERGY: Benchmark U.S. crude oil inched up 0.2 percent to $68.19 a barrel in New York. Brent crude, used to price international oils, rose 1 percent to $74.74 a barrel in London.

Oil prices have surged in recent months, and that has driven up fuel costs for many companies. Those expenses were a problem for airlines in the first quarter, as American said its profit fell 45 percent over the first three months of the year and cut its profit forecast for the rest of the year. Its stock lost 4.8 percent to $43.09.

Wholesale gasoline gained 1.1 percent to $2.11 a gallon. Heating oil rose 1.1 percent to $2.16 a gallon. Natural gas rose 1.3 percent to $2.82 per 1,000 cubic feet.

BONDS: Bond prices edged higher. The yield on the 10-year Treasury note dipped to 2.99 percent from 3.03 percent.

METALS: Gold lost 0.4 percent to $1,317.90 an ounce. Silver fell 0.1 percent to $16.49 an ounce. Copper sank 0.7 percent to $3.11 a pound.

OVERSEAS: France's CAC 40 rose 0.7 percent and the British FTSE 100 and German DAX both added 0.6 percent. Japan's benchmark Nikkei 225 index climbed 0.5 percent and South Korea's Kospi jumped 1.1 percent after Samsung reported better than expected earnings. Hong Kong's Hang Seng lost 1.1 percent.

CURRENCIES: The dollar rose to 109.36 yen from 109.34 yen and the euro dipped to $1.2106 from $1.2175.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay

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