Stocks concluded 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 about 0.5 %, while the Dow ended just a tick above the flatline. U.S. stocks shook off earlier declines after following 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 greater than one % and take back out of a record high, after the company posted a surprise quarterly benefit 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 regardless of the continuous pandemic. With over eighty % of companies now having reported fourth quarter outcomes, S&P 500 earnings per share (EPS) have topped estimates by 17 % in aggregate, and bounced back above pre COVID levels, in accordance with an analysis by Credit Suisse analyst Jonathan Golub.
"Prompt and good government action mitigated the [virus-related] damage, leading to outsized economic and earnings surprises," Golub said. "The earnings recovery has been considerably more robust than we could have thought possible when the pandemic for starters took hold."
Stocks have continued to establish new record highs against this backdrop, and as fiscal and monetary policy support remain strong. But as investors become comfortable with firming business performance, businesses may have to top even bigger expectations in order to be rewarded. This may in turn put some pressure on the broader market in the near term, and also warrant much more astute assessments of individual stocks, according to some strategists.
"It is actually no secret that S&P 500 performance has been pretty formidable over the past several calendar years, driven primarily through valuation expansion. However, with the index P/E [price-to-earnings ratio] recently eclipsing its prior dot com extremely 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 precisely what present expectations are forecasting. Nonetheless, we additionally found that these kinds of' EPS-driven' periods tend to be complicated from an investment strategy standpoint."
"We think that the' easy cash days' are actually more than for the time being and investors will have to tighten up the aim of theirs by evaluating the merits of individual stocks, rather than chasing the momentum-laden methods that have recently dominated the expense landscape," he added.
4:00 p.m. ET: Stocks end higher, S&P 500 and Nasdaq reach report closing highs
Here's exactly where the key 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' will be the most-cited Biden policy on company earnings calls: FactSet
Fourth-quarter earnings season represents the pioneer with President Joe Biden in the White House, bringing a brand new 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 company earnings calls so far, based on an analysis from FactSet's John Butters.
"In terms of government policies discussed in conjunction with the Biden administration, climate change as well as energy policy (twenty eight), tax policy (twenty COVID-19 and) policy (19) have been cited or talked about by the highest number of businesses through this point in time in 2021," Butters wrote. "Of these 28 companies, seventeen expressed support (or even a willingness to the office with) the Biden administration on policies to reduce carbon and greenhouse gas emissions. These seventeen corporations both discussed initiatives to minimize their very own carbon as well as greenhouse gas emissions or maybe services or items they provide to support customers and customers reduce the carbon of theirs and greenhouse gas emissions."
"However, 4 businesses also expressed a number of concerns about the executive order setting up a moratorium on new engine oil and gas leases on federal lands (plus offshore)," he added.
The list of 28 companies discussing climate change as well as energy policy encompassed organizations from an extensive array of industries, like 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 is 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 yield 1.185%
10:15 a.m. ET: Consumer sentiment suddenly plunges to a six-month low in February: U. Michigan
U.S. consumer sentiment slid to the lowest level after August in February, based on the University of Michigan's preliminary monthly survey, as Americans' assessments of the road forward for the virus-stricken economy suddenly grew a lot 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, based on Bloomberg consensus data.
The complete loss of February was "concentrated in the Expectation Index and among households with incomes below $75,000. Households with incomes in the bottom third reported major setbacks in their present finances, with fewer of the households mentioning latest income gains than anytime after 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 lessen fiscal hardships with those with probably the lowest incomes. Much more surprising 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's where markets were trading just 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 ever as investors pile into tech stocks: Bank of America
Stock funds simply saw their largest ever week of inflows for the period ended February ten, with inflows totaling a record $58.1 billion, based on Bank of America. Investors pulled a total of $800 million out of gold and $10.6 billion out of profit during 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 their second largest week of inflows ever at $25.1 billion, and U.S. smaller cap inflows saw the third largest week of theirs at $5.6 billion.
Bank of America warned that frothiness is actually rising in markets, nonetheless, as investors keep piling into stocks amid low interest rates, along with hopes of a good recovery for corporate earnings and the economy. The firm's proprietary "Bull and Bear Indicator" tracking 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 primary movements in markets, as of 7:16 a.m. ET Friday:
S&P 500 futures (ES=F): 3,904.00, down 8.00 points or perhaps 0.2%
Dow futures (YM=F): 31,305.00, down fifty four points or even 0.17%
Nasdaq futures (NQ=F): 13,711.25, down 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 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 thirty two points or 0.1%
Nasdaq futures (NQ=F): 13,703.5, down 25.5 points or even 0.19%