Tech sector, led by Intel, drives early gains for US stocks

Tech sector, led by Intel, drives early gains for US stocks
FILE - In this Oct. 2, 2019, file photo specialists James Denaro, left, and Mario Picone work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Friday, Oct. 25. (AP Photo/Richard Drew, File)

NEW YORK (AP) — U.S. stocks moved higher in early trading Friday as solid profits from chipmaker Intel propel gains for technology companies.

Intel rose 6.5% after raising its profit forecast for the year following a solid third quarter. Fellow chipmakers, including Nvidia, also made strong gains.

Communications companies and banks also rose.

Amazon dropped after reporting dismal results. V.F. Corp, which makes Vans and Timberland brands, shed 7.6% after reporting disappointing profit and sales.

Health care stocks also fell. Drug developer Gilead Sciences slipped 3.7%.

KEEPING SCORE: The S&P 500 index rose 0.1% as of 10:20 a.m. Eastern time. The Dow Jones Industrial Average rose 88 points, or 0.3%, to 26,894, partly on gains from Intel. The Nasdaq fell 0.1%. The Russell 2000 index of smaller stocks rose 0.3%.

NOT SO PRIME: Amazon fell 2.9% after releasing disappointing third-quarter profits and a weak sales forecast for the holiday shopping season. The company had higher costs as it adds workers in its warehouses and more software engineers for its cloud computing business.

EARNINGS SCORE: Companies have so far reported surprisingly good profits this earnings season, despite another forecast for a sharp contraction. Just over 39% of companies in the S&P 500 have reported results and 78% beat analysts’ forecasts, according to FactSet.

The results have tempered initial forecasts for a profit contraction of more than 4%, but the market hasn’t gained much ground.

Investors have been here before. Corporate profits were expected to shrink significantly during the first and second quarters, but surprisingly good results eventually led to a very slight overall contraction.

EARNINGS ON DECK: Some of the biggest names in technology and industry will release their results next week. Alphabet, Google’s parent company, will help kick things off on Monday. Drugmakers Merck and Pfizer will report results on Tuesday, as will carmaker General Motors.

Apple will release its results on Wednesday, along with Facebook. Exxon will report results on Friday.

ECONOMY UPDATE: Investors are also preparing for a deluge of economic data next week, including the Federal Reserve’s latest statement on interest rates, which is set for Wednesday. The latest employment figures and consumer confidence data will also be closely watched as gauges of the economy’s health.

The deluge of data, along with a steady flow of important corporate earnings reports, could inject more volatility into the markets.

Reports on home prices and sales, along with the latest data on consumer confidence, are expected Tuesday.

The Commerce Department will report third-quarter gross domestic product on Wednesday and personal income and spending data on Thursday.

The Labor Department’s employment report for October will be released on Friday.

OVERSEAS: Stocks in Europe edged lower. Surveys showed that consumers in Germany are growing more pessimistic about the global economy and that businesses are less happy with their current situation but have greater hope for the coming months. Germany is Europe’s biggest economy and is considered a gauge for Europe’s overall economic health.

The impact of Britain’s pending departure from the European Union also remains a lingering concern. European Union officials are meeting Friday in Brussels to decide whether to grant an extension to the Oct. 31 deadline.

Asian markets rose.