Surge for Tech Giants Lead Stocks Higher

NEW YORK (AP) — Facebook, Apple and Amazon surged in early trading Friday after reporting blowout results the night before, leading major indexes higher on Wall Street. The S&P 500 rose 0.3% in the early going, but the technology-heavy Nasdaq rose far more, 0.8%. Both are headed for solid weekly gains after another bumpy week of trading. Google parent Alphabet lagged behind. Even as tech giants mostly reap huge rewards from the stay-at-home economy during the coronavirus pandemic, there is plenty for investors to worry about, including a logjam in Congress that is holding up additional relief for millions of jobless Americans.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Global stock markets were subdued Friday after Europe posted a record drop in economic activity and investors digested a raft of corporate earnings reports.

The 12.1% quarter-on-quarter drop in eurozone GDP in the April-June period was the biggest since records began in 1995 and showed how the pandemic hit Spain, Italy and Portugal particularly hard. It came after the U.S. reported a drop in economic activity of almost the same size.

Wall Street appeared set to open higher, with Dow futures up 0.2% and those for the S&P 500 up 0.3%. France’s CAC 40 added 0.2% to 4,864, while Germany’s DAX gained 0.9% to 12,490. Britain’s FTSE 100 shed 0.1% to 5,986.

As bad as the second quarter economic growth figures were for Europe, economists note that the worst seems past, with indicators in the current quarter showing a pick-up in consumer spending and business activity. But the outlook is for a long and uncertain climb back to pre-virus levels that could take until 2022 or longer.

Overnight, the U.S. reported the economy contracted at a record-shattering 32.9% annual rate in April-June – equivalent to a 9.5% quarter-on-quarter drop.

News of the steep collapse came as a resurgence of outbreaks has pushed U.S. businesses in many areas to close for a second time. The government’s estimate of the second-quarter fall in the gross domestic product has no comparison since records began in 1947. The previous worst quarterly contraction — at 10%, less than a third of what was reported Thursday — occurred in 1958 during the Eisenhower administration.

Earlier, in Asia, Japan’s benchmark Nikkei 225 dropped 2.8% to finish at 21,710.00, while South Korea’s Kospi slipped 0.8% to 2,249.37. Australia’s S&P/ASX 200 sank 2.0% to 5,927.80. Hong Kong’s Hang Seng dipped 0.5% to 24,595.35, while the Shanghai Composite recouped earlier losses to gain 0.7%, at 3,310.01.

In one positive signal, China reported its manufacturing activity edged up in July and export orders strengthened despite weak U.S. and European demand. The monthly survey released Friday was another sign the world’s second-largest economy is gradually recovering from the coronavirus pandemic.

Corporate earnings from tech companies in the U.S. have largely been upbeat, while those in other industries have been more mixed. Earnings at Fiat Chrysler and Caterpillar beat expectations, though British Airways parent IAG was downbeat on the global aviation sector.

Benchmark U.S. crude gained 25 cents to $40.17 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 26 cents to $43.20 a barrel.

The dollar slipped to 104.62 Japanese yen from 104.73 yen. The euro cost $1.1866, up from $1.1846.

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