Traders and finance professionals work on the floor of the New York Stock Exchange.
Drew Angerer | Getty Images
US stocks rose on Friday as major averages tried to post their fourth straight day of earnings and ease worries about economic growth earlier in the week.
The Dow Jones Industrial Average gained 145 points, or 0.4%, for a fourth straight day. The S&P 500 rose 0.2%. The Nasdaq Composite was up 0.4%. The S&P 500 was on course for a record close above the July 12th closing high.
The 10-year government bond yield rose to 1.285% on Friday, easing economic concerns raised by the bond market on Monday. The 10-year yield fell to a 5-month low of 1.13% earlier this week.
“We expect the markets to remain choppy, but there is no basic justification for more aggressive sales,” wrote the Barclays strategists in a customer announcement. “In fact, the strong recovery since Tuesday shows that the animal spirits are intact.”
Strong gains from technology stocks kept investors optimistic amid reports from the biggest names in the industry over the next week. Twitter and Snap both rose Thursday after better-than-expected earnings reports for the second quarter. Twitter traded more than 1% higher while Snap shot up 22%.
Facebook gained about 3% over the results of its social media competitors. Alphabet added about 1.5%. Both will report next week together with Apple, Microsoft and Amazon.
All three US stock averages are on track to close the week in the green after recovering from last week’s losses and sharp sell-off on Monday. The Dow lost more than 700 points at the start of the week as yields fell, unsettling equity investors about the economy.
The S&P 500 is up more than 1% this week and the Nasdaq Composite is up about 2%. Both are also within 1% of their intraday records. The Dow is up 0.8% for the week.
The strength of tech stocks also comes along with the continued proliferation of the highly contagious Delta variant of Covid.
“We saw in the depths of the pandemic that tech stocks and their earnings did best at BMO Wealth Management,” said. “Long-term interest rates, which are falling as much as they did, also make these stocks more attractive.”
The equity market as a whole was supported by a strong reporting season. With a quarter of the S&P 500 reporting, Refinitiv expects earnings growth of 76% for the second quarter, the best growth since 2009. And profit margins are holding up amid rising inflation. For the second quarter, the companies have so far reported average profit margins of 12.8%, according to S&P Global, which is above the historical range.
American Express reported better-than-expected quarterly results on Friday morning, giving its stocks a 3.5% gain.
Honeywell also reported strong gains, even though the stock was down 1.5%. Kimberly-Clark shares fell 3% after earnings were reported in line with Wall Street forecasts. The annual forecast was also lowered, citing higher costs and lower volumes.
