By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower on Friday, retreating from record highs that were hit earlier in the week as Big Tech lived up to ambitious expectations for the first quarter.
Amazon (NASDAQ:AMZN) rounded off a vintage quarter for Silicon Valley on Thursday evening, posting profits that were over three times the level of a year ago, the embodiment of how the pandemic has accelerated long-term trends toward online shopping and remote working. As with Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) earlier in the week, Amazon also profited from rapid growth in its advertising business. Amazon stock rose 0.8% in early trade, defying the broader trend
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was down 140 points, or 0.4%, at 33,920 points. The S&P 500 was down 0.6%, as was the Nasdaq Composite.
The main indices are still all on course to end the week higher, and some analysts have already revised up their year-end targets after a better-than-expected first quarter: Credit Suisse (SIX:CSGN) analysts raised their S&P target for the year to 4,600, implying another 10% upside from current levels. They raised their aggregate earnings per share estimate for the index to $200 from $185.
Data published earlier offered a reminder of how much the current rally – and the economic recovery from the pandemic in general – owes to the vast scale of stimulus measure. U.S. personal income rose 21.1% in March as stimulus checks reached households across the country. Personal spending, meanwhile, rose by 4.2%. There was a frisson of excitement among inflation hawks after other numbers showed core personal consumer expenditures rising by 0.4% in March, more than expected and matching their highest increase in 20 years.
Twitter (NYSE:TWTR) was the standout performer in early trading, albeit for the wrong reasons. The stock fell 12.7% after management warned of slowing user growth in the second quarter, as well as rising costs.
Apple (NASDAQ:AAPL) stock was also in focus early, falling 0.7% after EU antitrust authorities said in a preliminary ruling that it had abused a dominant market position in the streaming business.
Big Oil, meanwhile, failed to impress with its quarterly updates: Exxon Mobil (NYSE:XOM) stock fell 0.4% and Chevron (NYSE:CVX) stock fell 1.6%, as the former broadly met expectations while the latter missed, thanks to the cold snap that disrupted almost all of the U.S. oil and gas complex in February. Chevron's earnings are more exposed to the U.S. geographically, since its acquisition of Noble last year.