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Dow Jones and NASDAQ continue rally; Chevron, Merck & Co., Amazon and Expedia in focus

The U.S. equity markets finished the end of the week higher, with the Dow Jones adding 24 points to 13,228, with the NASDAQ climbing 19 points to 3069.

U.S. equity markets were overnight after corporate results and economic data bolstered views on the American consumer.

By the close, the Dow Jones had added 24 points to 13,228, with the NASDAQ 19 points higher to 3069.

In corporate news, two of the world's major automakers Friday posted earnings with Ford Motor Co. (NYSE:F) recording a 45 percent drop in first-quarter net income while Honda (NYSE:HND) posted a jump of 61% in profits.

Ford cited the drop in profitability on lower European sales and higher taxes.

Chevron (NYSE:CVX) reported a four percent increase in quarterly profit Friday, as rising oil prices and refining margins made up for a decline in oil and gas production, but the company still missed analyst views.

For the three months that ended March 31, the second-largest US oil company posted net income of $6.47 billion, or $3.27 per share, up from $6.21 billion, or $3.09 per share, a year ago. Analysts polled by Thomson Reuters expected earnings per share of $3.26 for the quarter.

Merck & Co. (NYSE:MRK) said fiscal first-quarter profits surged 67 percent on Thursday amid sales gains for its diabetes drug Janumet and in markets such as China.

Stripping away one-time items in both periods, the company earned 99 cents a share up from 92 cents a share a year ago, which beat analyst estimates by one cent.

Top performers on Friday's markets were Amazon (NASDAQ:AMZN) and Expedia (NASDAQ:EXPE), which both beat analyst estimates late Thursday.

Amazon posted first-quarter profits that blew by analysts' estimates with its Kindle Fire tablet helping to lift revenue from digital movies and books.

Net income for the first quarter declined to $130 million, or 28 cents per share, from $201 million, or 44 cents per share a year ago. That was still better than the 6 cents per share of profit expected by analysts polled by FactSet.

Meanwhile, Expedia surged more than 27% as the company reported strong earnings.

But Procter & Gamble (NYSE:PG) said Friday fiscal third-quarter profit tanked 16 percent as price increases couldn’t offset higher commodity costs, and the company lowered its full-year earnings forecast. Shares were down 3.6%.

On the economic front, U.S. economic growth cooled in the first quarter as businesses cut back on investment and restocked shelves at a moderate pace, but stronger demand for automobiles softened the blow.

Gross domestic product expanded at a 2.2% annual rate, the Commerce Department said on Friday in its advance estimate, moderating from the fourth quarter's 3% rate.

Compensation costs for civilian workers increased a seasonally adjusted 0.4% in the first quarter, the Labor Department said Friday.

Wages and salaries, which make up about 70% of compensation costs, increased 0.5%, and benefits also rose 0.5%.

The University of Michigan Consumer Sentiment Index rose to 76.4 in April, roughly in line with estimates. The index was 76.2 in March.

Commodities

In NYMEX futures trading, crude for June delivery advanced 28 cents, or 0.3%, to $104.83 a barrel while gold futures for June
delivery rose $4.30, or 0.3%, to $1,664.80 an ounce.

Europe

Late Thursday S&P announced that it was downgrading Spain's credit rating from "A" to "BBB+" citing numerous drags on growth, and an ailing banking sector that might require further government support.

The downgrade places Spanish debt only three steps above junk bond status.

European stocks closed higher with the FTSE 100 rising 0.5%, the CAC 40 gaining 1.1% and the DAX closing up 0.9%.

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