Stocks ended 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 %, while the Dow ended just a tick above the flatline. U.S. stocks shook off earlier declines after monitoring a drop in overseas equities, after new data showed that UK gross domestic product (GDP) slumped by a record 9.9 % in 2020 as a virus-induced recession swept the nation.
Shares of Dow component Disney (DIS) reversed earlier gains to fall more than 1 % and take back from a record extremely high, after the company posted a surprise quarterly profit and grew Disney+ streaming subscribers more than expected. Newly public company Bumble (BMBL), which started trading on the Nasdaq on Thursday, rose another 7 % after jumping 63 % in its public debut.
Over the past couple weeks, investors have absorbed a bevy of stronger than expected earnings benefits, with company profits rebounding much faster than expected despite the ongoing pandemic. With more than 80 % of businesses these days having claimed fourth-quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by 17 % for aggregate, and bounced back above pre-COVID amounts, according to an analysis by Credit Suisse analyst Jonathan Golub.
good government behavior and "Prompt mitigated the [virus related] damage, leading to outsized economic and earnings surprises," Golub said. "The earnings recovery has been substantially more robust than we might have thought possible when the pandemic first took hold."
Stocks have continued to set up fresh record highs against this backdrop, and as monetary and fiscal policy support remain robust. But as investors become used to firming business functionality, businesses may have to top even bigger expectations to be rewarded. This could in turn put some pressure on the broader market in the near term, as well as warrant much more astute assessments of individual stocks, based on some strategists.
"It is actually no secret that S&P 500 performance continues to be pretty strong over the past several calendar years, driven mostly through valuation expansion. However, with the index P/E [price-to-earnings ratio] recently eclipsing its previous dot com high, we believe 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 work, strong EPS growth would be required for the following leg greater. Thankfully, that's exactly what current expectations are forecasting. Nevertheless, we in addition found that these sorts of' EPS-driven' periods tend to be more tricky from an investment strategy standpoint."
"We believe that the' easy cash days' are more than for the time being and investors will need to tighten up the focus of theirs by evaluating the merits of specific stocks, rather than chasing the momentum laden practices which have recently dominated the expense landscape," he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach record closing highs
Here's where the main stock indexes finished 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 company earnings calls: FactSet
Fourth-quarter earnings season marks the pioneer with President Joe Biden in the White House, bringing an innovative political backdrop for corporations to contemplate.
Biden's policies around climate change and environmental protections 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 and energy policy (twenty eight), tax policy (twenty COVID-19 and) policy (nineteen) have been cited or maybe reviewed by the highest number of businesses with this point in time in 2021," Butters wrote. "Of these twenty eight firms, 17 expressed support (or a willingness to your workplace with) the Biden administration on policies to reduce carbon as well as greenhouse gas emissions. These 17 companies both discussed initiatives to minimize the own carbon of theirs as well as greenhouse gas emissions or maybe services or products they give to support customers and customers lower the carbon of theirs and greenhouse gas emissions."
"However, four companies also expressed a number of concerns about the executive order setting up a moratorium on new oil as well as gas leases on federal lands (plus offshore)," he added.
The list of twenty eight companies discussing climate change and energy policy encompassed organizations from a broad array of industries, like JPMorgan Chase, United Airlines Holdings and 3M, alongside traditional oil majors as Chevron.
11:36 a.m. ET: Stocks mixed, S&P 500 and Nasdaq turn positive
Here is where markets had been 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 yield 1.185%
10:15 a.m. ET: Consumer sentiment unexpectedly plunges to a six month low in February: U. Michigan
U.S. consumer sentiment slid to probably the lowest level after August in February, based on the Faculty of Michigan's preliminary month to month survey, as Americans' assessments of the path forward for the virus stricken economy unexpectedly grew much more grim.
The title consumer sentiment index dipped to 76.2 from 79.0 in January, sharply missing expectations for a rise to 80.9, according to Bloomberg consensus data.
The complete loss of February was "concentrated in the Expectation Index and involving households with incomes under $75,000. Households with incomes of the bottom third reported significant setbacks in the current finances of theirs, with fewer of the households mentioning recent income gains than anytime since 2014," Richard Curtin chief economist for the university's Surveys of Consumers, said in a statement.
"Presumably a brand new round of stimulus payments will bring down fiscal hardships among those with probably the lowest incomes. More shocking was the finding that customers, despite the expected passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February compared to more month," he added.
9:30 a.m. ET: Stocks open lower, but pace toward posting weekly gains
Here's where markets had been 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 deliver 1.19%
9:05 a.m. ET: Equity funds see highest weekly inflows actually as investors pile into tech stocks: Bank of America
Stock funds simply saw their largest-ever week of inflows for the period ended February 10, 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 cash during the week, the firm added.
Tech stocks in turn saw the own record week of theirs of inflows at $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, nonetheless, as investors continue piling into stocks amid low interest rates, along with hopes of a solid 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 were the principle actions in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, printed 8.00 points or perhaps 0.2%
Dow futures (YM=F): 31,305.00, down fifty four points or perhaps 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 yield 1.163%
6:03 p.m. ET Thursday: Stock futures tick higher
Here's in which markets were trading Thursday as over night trading kicked off:
S&P 500 futures (ES=F): 3,904.50, printed 7.5 points or perhaps 0.19%
Dow futures (YM=F): 31,327.00, down 32 points or 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or perhaps 0.19%