NEW YORK (AP) — Strong third-quarter results from technology companies drove investors into stocks on Friday, giving the market its third straight weekly gain.
After reporting results that topped expectations, Microsoft rose 6 percent and Amazon.com rose 9 percent. The Standard & Poor’s 500 index hit a record. The Nasdaq is the highest it’s been in 13 years.
The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.
Most companies that have reported third-quarter earnings are beating financial analysts’ estimates. Even so, earnings for companies in the S&P 500 index are expected to grow just 4.5 percent over the same period a year ago, according to S&P Capital IQ, a research firm. At the start of the year, earnings were expected to rise at more than twice that pace.
Some market watchers are calling for caution, saying that a significant part of the profit growth has come from cutting expenses, not increasing revenue, as the global economy remains sluggish.
“The question is: What is the outlook for earnings?” Steven Ricchiuto, chief economist at Mizuho Securities, said. “There is only so much you can do with cost-cutting.”