Stocks climb as Facebook and other tech giants rally

People pass the New York Stock Exchange in October 2017.
(Richard Drew / AP)

U.S. stocks climbed Thursday as Facebook led a rally by technology companies. Most of the market moved higher as interest rates declined from the four-year highs reached over the last few days.

Facebook’s stock withered last month after the company’s data privacy scandal, but the shares surged Thursday as the controversy didn’t appear to affect the social media platform’s business in the first quarter. Other big technology companies, such as Alphabet and Microsoft, also rallied, reversing some of their recent losses.

Strong first-quarter results from companies including Chipotle Mexican Grill and O’Reilly Automotive helped retailers and other consumer-focused firms. Amazon surged. Energy companies climbed. Stock indexes rose and interest rates decreased after a Commerce Department survey showed business investment decreased in March for the third time in the last four months.


Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute, said investors were happy to see the decline in business investment 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.

The Standard & Poor’s 500 index climbed 27.54 points, or 1%, to 2,666.94. The Dow Jones industrial average advanced 238.51 points, or 1%, to 24,322.34. The technology-heavy Nasdaq composite jumped 114.94 points, or 1.6%, to 7,118.68.

The Russell 2000 index of smaller-company stocks rose 7.43 points, or 0.5%, to 1,557.89.

Three months ago, the S&P 500 and Dow closed at all-time highs. At that time, they had repeatedly set records for a year and a half. But since Jan. 26, the market has been hit by worries about rising inflation and a trade war between the United States and China, and titans such as Facebook and Amazon have had a rough ride. The S&P 500 is down 7.2% in the last three months, and the Dow has slumped 8.6% in that time.

On Thursday, Facebook surged 9.1% to $174.16 after the company’s advertisers appeared to shrug off the Cambridge Analytica privacy scandal. Facebook said its revenue jumped and there were few signs users or advertisers were abandoning the company since the scandal broke in mid-March.

Alphabet — Google’s parent company and the only digital publisher larger than Facebook — rose 2% to $1,043.31. Twitter rose 1.7% to $30.27.


Facebook has faced backlash about how it collects and uses data since the revelation that Cambridge Analytica, a data-mining firm linked to the Trump campaign, gained information on up to 87 million Facebook users.

Facebook stock is down 5.9% since then, and other technology companies have also stumbled as investors worried about the possibility that the government would start regulating them more harshly. Such regulation could affect their profits.

Amazon jumped 4% to $1,517.96 on Thursday, then rose an additional 6% in aftermarket trading as Wall Street was pleased with the online retailer’s first-quarter results and second-quarter forecast.

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” for the market, he said.

Chipotle Mexican Grill soared 24.4% to $422.50 after the company said sales improved in the first quarter, raising hopes that the chain is recovering from repeated food-safety scares. In mid-2015, its shares traded as high as $757.


Bond prices edged up. The yield on the 10-year Treasury note fell to 2.98% from 3.03%.

AT&T fell 6% to $33.107 after its profit and revenue fell short of Wall Street estimates, and analysts said its video business struggled.

EBay slid 5.6% to $38.68 after its first-quarter sales and second-quarter forecast disappointed Wall Street.

Benchmark U.S. crude oil rose 0.2% to $68.19 a barrel. Brent crude, used to price international oils, rose 1% to $74.74 a barrel.

Oil prices have surged in recent months, driving up fuel costs for many companies. Those expenses were a problem for airlines in the first quarter. American Airlines’ stock plunged 46.4% to $42.37 after it said its profit fell 45%. The company cut its profit forecast for the rest of the year.

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

Gold fell 0.4% to $1,317.90 an ounce. Silver fell 0.1% to $16.49 an ounce. Copper fell 0.7% to $3.11 a pound.


The dollar rose to 109.36 yen from 109.34 yen. The euro fell to $1.2106 from $1.2175.


2:35 p.m.: This article was updated throughout with closing prices, context and analyst comment.

This article was originally published at 7:15 a.m.