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Stocks surge on inflation data – Amazon stuck plummets – Apple and Intel climb on earnings – Mortgage rates top 7% for first time in 20 years – Treasury website falters in “unprecedented” rush for 9.62% I Bonds
The Dow Jones industrial average rallied on Friday, bolstered by a fresh dose of inflation data from the personal consumption expenditure index, as it bounced up 275 points or 0.9%, Yahoo reported.
The S&P 500 nudged up 0.5%, and the tech-heavy Nasdaq Composite rose 0.4%. Treasury yields also charged back above 4%.
After Amazon stock plunged on a weak third-quarter sales report, shares fell nearly 10% as the results beat on earnings but gave an outlook that fell short on a disappointing fourth-quarter guidance, Investors Business Daily reported.
Amazon initially tanked by 20% on Thursday after the report revealed Mrs. on revenue and sales for its Amazon Web services cloud business, Yahoo reported. Its Amazon Web Services (AWS) net sales brought in $20.5 billion in actual revenue versus the $21 billion expected.
Amazon reported $127.1 billion in actual revenue versus $127.63 billion expected and 28 cents actual adjusted earnings-per-share (EPS) versus 22 cents expected.
Fourth-quarter outlook is between $140 billion and $144 billion instead of the expected $155 billion.
Faring better than its Big Tech peers, Apple reported record revenue although missing analyst projections, with shares rising 4% in early trading on Friday, Yahoo reported.
Other key movers were Dow Jones stocks Intel, which jumped 8 percent after beating lowered expectations for the third quarter, Chevron rising 1.9 percent, and Exxon gained roughly 2 percent, Investors Business Daily reported.
Freddie Mac reported on Thursday that the average on the key 30-year rate jumped to 7.08% from 6.94% last week. It marks the first time the average rate rose above 7 percent in over twenty years, going back to April 2002, the New York Post reported. A year ago, the rate on a thirty-year mortgage averaged 3.14%. Mortgage rates have more than doubled this year.
At the last September meeting, officials from the Federal Reserve projected that they will raise the key interest rate to roughly 4.5%. Mortgage rates don’t necessarily mirror Fed rate increases, but tend to track the yield on a 10-year Treasury note.
People waiting until the last minute on Thursday or Friday to purchase I Bonds may find themselves out of luck due to “unprecedented demand.”
October 28 is the deadline to secure 9.62% annual interest for Series I Bonds for six months. Investors must purchase I Bonds and receive a confirmation email by Oct. 28 to lock in the record 9.62% rate, CNBC reported.
With the rate expected to drop to roughly 6.48% in November, based on inflation, as predicted by experts, it caused a rush by investors on Thursday, and the Treasury Department’s website could not keep up with the traffic, continually unable to refresh and dropping pages.
The Treasury Department’s website noted it was experiencing “unprecedented requests for new accounts and purchases of I Bonds,” the Detroit Free Press reported.
“Due to these volumes, we cannot guarantee customers will be able to complete a purchase by the October 28th deadline for the current rate,” the Treasury Direct website stated. “Our agents are working to help customers who need assistance as quickly as possible.”
