The biggest company in the world by market capitalization, Apple (NASDAQ:AAPL) was trading lower on Friday after a disappointing outlook. However, it did not bring down the markets as the major indexes were all moving higher, buoyed by some economic news that the market deemed as favorable.
As of 2:15 p.m. Eastern on Friday, the Dow Jones Industrial Average was up 263 points (0.8%), the S&P 500 was up 46 points (1.1%), and the Nasdaq Composite was up 192 points (1.5%). Among the biggest movers on Friday were Expedia (NASDAQ:EXPE), Gartner (NYSE:IT) and DraftKings (NASDAQ:DKNG).
Apple and jobs
The two major market developments on Friday were Apple’s fiscal fourth-quarter earnings, released Thursday after the market close, and the October jobs report.
We’ll start with Apple, which beat earnings and revenue estimates this past quarter, although its sales were down 1% to $89.5 billion, marking the fourth straight quarter of declining year-over-year sales. There were some bright spots though, as the iPhone saw record revenue for the September quarter, as did Apple’s services division. Net income rose 13% to $23 billion, or $1.46 per diluted share.
While not a great quarter, it certainly wasn’t terrible, but the market seemed to be less enthused by expectations for flat revenue on a year-over-year basis in the first fiscal quarter, when the holidays hit. Analysts were projecting a 5% year-over-year revenue boost in the holiday quarter. Apple stock dropped about 3% in after-hours trading but was only down about 1.3% Friday, at roughly $175 per share as of 2:15 p.m. Eastern.
The other big news of the day was the jobs report, which came in worse than expected, adding 150,000 jobs when 170,000 new jobs were expected. The unemployment rate ticked up to 3.9% from 3.8%.
It may be counterintuitive to think that this would spur a market rally, but a cooling jobs market is seen as a sign that the Federal Reserve’s interest-rate hikes are doing their job to slow down the economy and reduce inflation. The market likely viewed this favorably, believing it will give the Fed less reason to raise rates again.
Friday’s big movers
One of the biggest movers on Friday was online travel company Expedia. The stock was up 18% on Friday as of 2:15 p.m. Eastern, trading at over $111 per share. Expedia soared on strong Q3 earnings released Thursday, as gross bookings on its site hit a record $18.5 billion. Revenue hit a record $3.9 billion, up 9% year over year, while adjusted net income also set a record at $778 million, up 21% year over year.
Another top stock on Friday was DraftKings. The online sports-betting company was up 15.4% on Friday as of 2:15 p.m. Eastern, trading at just over $33 per share. DraftKings had a blowout third quarter with revenue up 57% year over year. Average monthly unique payers (MUPs) increased 40% to 2.3 million, while average revenue per MUP was $114, up 14% compared to the same period in 2022.
DraftKings also raised its FY 2023 guidance, now expecting an adjusted EBITDA loss of between $95 million and $115 million, up from the previous adjusted EBITDA guidance for a loss of between $190 million and $220 million. For 2024, the company expects a roughly 25% year-over-year increase in revenue to between $4.5 billion and $4.8 billion. It also anticipates positive adjusted EBITDA of between $350 million and $450 million, as Maine, Puerto Rico, Vermont and North Carolina are slated to approve sports betting.
Gartner, the technology research and consulting firm, also had a big day on Friday, buoyed by strong Q3 earnings, which were released Friday morning. Gartner’s stock had gained about 15% as of Friday afternoon at 2:15 p.m. Eastern, trading at around $389 per share. Gartner grew revenue by 6% year over year in the quarter, increased its contract value by 8%, and boosted its net income by 4%. The firm also raised its guidance for fiscal year 2023.
