Stocks finished higher on Friday, with the S&P 500 and Nasdaq closing out the session at record levels.
The S&P 500 and Nasdaq each rose aproximatelly 0.5 %, even though the Dow ended simply a tick above the flatline. U.S. stocks shook off earlier declines after tracking a drop in overseas equities, after new data showed that UK gross domestic product (GDP) slumped by a report 9.9 % in 2020 as a virus induced recession swept the nation.
Shares of Dow component Disney (DIS) reversed earlier benefits to fall more than one % and take back out of a record extremely high, after the company posted a surprise quarterly benefit and grew Disney+ streaming subscribers much more than expected. Newly public company Bumble (BMBL), which set about trading on the Nasdaq on Thursday, rose another 7 % after jumping sixty three % in its public debut.
Over the past couple weeks, investors have absorbed a bevy of much stronger than expected earnings benefits, with corporate profits rebounding way quicker than expected despite the continuous pandemic. With at least 80 % of businesses now having claimed fourth-quarter results, S&P 500 earnings per share (EPS) have topped estimates by seventeen % in aggregate, and bounced back above pre-COVID amounts, in accordance with an analysis by Credit Suisse analyst Jonathan Golub.
generous government action and "Prompt mitigated the [virus-related] injury, leading to outsized economic and earnings surprises," Golub said. "The earnings recovery has been considerably more powerful than we may have imagined when the pandemic for starters took hold."
Stocks have continued to set up fresh record highs against this backdrop, and as monetary and fiscal policy support remain strong. But as investors become accustomed to firming business performance, companies could possibly need to top greater expectations to be rewarded. This may in turn put some pressure on the broader market in the near-term, as well as warrant much more astute assessments of specific stocks, according to some strategists.
"It is actually no secret that S&P 500 performance has long been really powerful over the past few calendar years, driven mostly via valuation expansion. But, with the index P/E [price-to-earnings ratio] recently eclipsing its previous dot com high, we think that valuation multiples will begin to compress in the coming months," BMO Capital Markets strategist Brian Belski wrote in a note Thursday. "According to our job, strong EPS growth will be required for the following leg greater. Fortunately, that's precisely what current expectations are forecasting. However, we also found that these types of' EPS-driven' periods tend to be more challenging from an investment strategy standpoint."
"We believe that the' easy cash days' are over for the time being and investors will need to tighten up the focus of theirs by evaluating the merits of individual stocks, rather than chasing the momentum-laden strategies who have just recently dominated the investment landscape," he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach report closing highs
Here's where the main stock indexes ended the session:
S&P 500 (GSPC): +18.55 points (+0.47 %) to 3,934.93
Dow (DJI): +27.44 points (+0.09 %) to 31,458.14
Nasdaq (IXIC): +69.70 points (+0.5 %) to 14,095.47
2:58 p.m. ET:' Climate change' would be the most cited Biden policy on corporate earnings calls: FactSet
Fourth-quarter earnings season represents the very first with President Joe Biden in the White House, bringing an innovative political backdrop for corporations to contemplate.
Biden's policies around environmental protections as well as climate change have been the most cited political issues brought up on corporate earnings calls so far, according to an analysis from FactSet's John Butters.
"In terms of government policies talked about in conjunction with the Biden administration, climate change as well as energy policy (28), tax policy (20 COVID-19 and) policy (19) have been cited or maybe talked about by the highest number of companies through this point on time in 2021," Butters wrote. "Of these twenty eight firms, seventeen expressed support (or even a willingness to the office with) the Biden administration on policies to greatly reduce carbon as well as greenhouse gas emissions. These 17 firms either discussed initiatives to minimize the own carbon of theirs as well as greenhouse gas emissions or maybe services or items they give to help clientele and customers lower the carbon of theirs and greenhouse gas emissions."
"However, four businesses also expressed a number of concerns about the executive order establishing a moratorium on new engine oil and gas leases on federal lands (plus offshore)," he added.
The list of twenty eight firms discussing climate change and energy policy encompassed companies from an extensive array of industries, including JPMorgan Chase, United Airlines Holdings and 3M, alongside conventional oil majors as Chevron.
11:36 a.m. ET: Stocks combined, S&P 500 and Nasdaq turn positive
Here's where markets were trading Friday intraday:
S&P 500 (GSPC): +7.87 points (+0.2 %) to 3,924.25
Dow (DJI): -8.77 points (0.03 %) to 31,421.93
Nasdaq (IXIC): +28.15 points (+0.21 %) to 14,053.77
Crude (CL=F): +$0.65 (+1.12 %) to $58.89 a barrel
Gold (GC=F): +$0.20 (+0.01 %) to $1,827.00 per ounce
10-year Treasury (TNX): +2.7 bps to deliver 1.185%
10:15 a.m. ET: Consumer sentiment unexpectedly plunges to a six month lower in February: U. Michigan
U.S. consumer sentiment slid to the lowest level since August in February, based on the University of Michigan's preliminary monthly survey, as Americans' assessments of the road ahead for the virus stricken economy suddenly grew more grim.
The title consumer sentiment index dipped to 76.2 from 79.0 in January, sharply losing out on expectations for a surge to 80.9, as reported by Bloomberg consensus data.
The whole loss in February was "concentrated in the Expectation Index and among households with incomes under $75,000. Households with incomes in the bottom third reported major setbacks in their present finances, with fewer of these households mentioning recent income gains than whenever after 2014," Richard Curtin chief economist for the university's Surveys of Consumers, said in a statement.
"Presumably a new round of stimulus payments will reduce financial hardships with those with probably the lowest incomes. Much more shocking was the finding that customers, despite the likely passage of a large stimulus bill, viewed prospects for the national economy less favorably in early February compared to last month," he added.
9:30 a.m. ET: Stocks open lower, but pace toward posting weekly gains
Here is where marketplaces were trading only after the opening bell:
S&P 500 (GSPC): 8.31 points (-0.21 %) to 3,908.07
Dow (DJI): 19.64 (0.06 %) to 31,411.06
Nasdaq (IXIC): -53.51 (+0.41 %) to 13,970.45
Crude (CL=F): -1dolar1 0.23 (-0.39 %) to $58.01 a barrel
Gold (GC=F): 1dolar1 10.70 (0.59 %) to $1,816.10 per ounce
10-year Treasury (TNX): +3.2 bps to yield 1.19%
9:05 a.m. ET: Equity funds see highest weekly inflows ever as investors pile into tech stocks: Bank of America
Stock cash just simply saw their largest-ever week of inflows for the period ended February ten, with inflows totaling a record $58.1 billion, according to Bank of America. Investors pulled a total of $800 million out of gold and $10.6 billion out of money throughout the week, the firm added.
Tech stocks in turn saw the own record week of theirs of inflows during $5.4 billion. U.S. large cap stocks saw the second-largest week of theirs of inflows ever at $25.1 billion, and U.S. tiny cap inflows saw the third largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is rising in markets, however, as investors keep on piling into stocks amid low interest rates, as well as hopes of a strong recovery for corporate earnings and the economy. The firm's proprietary "Bull and Bear Indicator" monitoring market sentiment rose to 7.7 from 7.5, nearing an 8.0 "sell" signal.
7:14 a.m. ET Friday: Stock futures point to a lower open
Here had been the main moves in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, printed 8.00 points or even 0.2%
Dow futures (YM=F): 31,305.00, down fifty four points or even 0.17%
Nasdaq futures (NQ=F): 13,711.25, printed 17.75 points or perhaps 0.13%
Crude (CL=F): -1dolar1 0.43 (-0.74 %) to $57.81 a barrel
Gold (GC=F): -1dolar1 9.50 (-0.52 %) to $1,817.30 per ounce
10-year Treasury (TNX): +0.5 bps to deliver 1.163%
6:03 p.m. ET Thursday: Stock futures tick higher
Here is where markets had been trading Thursday as overnight trading kicked off:
S&P 500 futures (ES=F): 3,904.50, printed 7.5 points or even 0.19%
Dow futures (YM=F): 31,327.00, down thirty two points or even 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or 0.19%