The Dow and S&P 500 rose Friday morning, extending their recent rallies into new record territory, amid a fresh flurry of corporate quarterly results to end the first week of earnings season.
Investors will pore over reports from Morgan Stanley, Bank of New York Mellon, Citizens Financial Group and PNC Financial Services Group.
How are benchmarks trading?
The Dow Jones Industrial Average
rose 200 points to reach 34,232, a gain of 0.6%, notching an intraday all-time high at 34,256.75.
The S&P 500 index
climbed 12 points, or 0.3%, to 4,181, after establishing an all-time intraday record at 4,187.16.
The Nasdaq Composite Index
declined 30 points, or 0.2%, to 14,010.
On Thursday, the Dow gained 305.10 points, or 0.9%, to finish at 34,035.99, setting a new closing record and an intraday all-time high earlier in the session. The S&P 500 added 45.76 points to reach 4,170.42, a gain of 1.1%, booking a record, while the Nasdaq Composite Index advanced 180.92 points, or 1.3%, to 14,038.76, ending 0.4% from its Feb. 12 closing record.
For the week, the Dow is up 1.2%, while the S&P 500 is on track for a 1.3% weekly rise and the Nasdaq Composite is looking at a weekly gain of 0.8%. The Dow and S&P 500 are aiming for a fourth straight weekly advance, while the Nasdaq is set for a third.
What’s driving the market?
With the recovery from the COVID pandemic on display in this week’s U.S. economic data, including retail sales and weekly jobless benefit claims, reflecting the massive fiscal stimulus from Washington and the vaccine rollout, investors are pushing the major stock indexes to new heights.
Earnings also have helped to support optimism about the recovery, as the nation’s biggest banks, Goldman Sachs Group
and JPMorgan Chase & Co
produced results that are promising for the American economic outlook.
Hope for further improvement comes as China’s economic growth surged by 18.3% year-over-year in the first quarter, with retail sales up 34.2% in the world’s second largest economy.
“Although the year-over-year comparisons are skewed considering that China was in lockdown this time last year, it still confirms that the world’s second largest economy is making meaningful strides in the post-pandemic era,” wrote Han Tan, market analyst at FXTM.
A number of experts however noted that China’s data on a quarterly basis, however, are lower than had been expected and do reflect a slackening pace of improvement.
Still, “hopes of a broad-based U.S. recovery have been fueled by yesterday’s economic releases, featuring the lowest weekly jobless claims since March 2020 and the highest monthly gain for industrial production since July,” Tan said.
Tan said that what is “crucial for investor sentiment is that this economic recovery doesn’t show signs of letting up,” including global COVID vaccinations and fiscal and monetary support, which have been supportive to the market and the economy.
That said, the head of the Centers for Disease Control and Prevention, Jose, Romero, told Bloomberg that the Johnson & Johnson’s pause in the U.S. could last for several weeks, noting that an advisory committee could review the extremely rare blood-clotting issues that have been the source of its temporary halt on April 23.
On the economic front, new-home construction surged at a seasonally adjusted annual rate of 1.74 million in March, representing a 19% jump from the previous month’s increased figure, the U.S. Census Bureau reported Wednesday. Compared with March 2020, housing starts were up a notable 37%.
Meanwhile, a report on consumer sentiment will be released at 10 a.m.
Which companies are in focus?
- Shares of Morgan Stanley MS fell in premarket trading Friday, even after the financial services company reported first-quarter profit that more than doubled and revenue that jumped 60% to record levels, boosted by strength in the institutional securities business. The bank did report that a single prime brokerage client cost it nearly $1 billion, leading some to believe that the bank was hit by the Archegos Capital Management implosion.
- Shares of Bank of New York Mellon Corp. BK were indicated up fractionally in premarket trading Friday, after the bank reported first-quarter profit and revenue that fell from a year ago, given the impact of low interest rates, but topped expectations.
reported a first-quarter net income of $1.8 billion or $4.10 earnings per share.
reported first-quarter net income of $611 million and EPS of $1.37.
- Eli Lilly and Co. LLY said Friday it is seeking a revocation of the emergency use authorization granted by U.S. regulators for its bamlanivimab antibody treatment for COVID-19 alone to complete the transition to bamlanivimab and etesevimab together.
- Biomea Fusion Inc. BMEA, was set to go public Friday, as the California-based biopharmaceutical company focused on treatment of genetically defined cancers said its upsized initial public offering priced at $17 a share, at the high end of the expected range of between $15 and $17 a share.
Shares of DraftKings Inc.
were headed higher over 3% after it was named among a group of official sports betting partners of the National Football League.
How are other assets faring?
- The ICE U.S. Dollar Index DXY, -0.14%, a measure of the currency against a basket of six major rivals, was down 0.1% at 91.568.
- U.S. crude for May delivery CL.1 edged 1 cents, or 0.2%, lower to $63.41 per barrel on the New York Mercantile Exchange.
- The 10-year Treasury note yield BX:TMUBMUSD10Y added nearly 4 basis points to basis points to 1.571%. Bond prices move inversely to yields.
- Gold futures traded higher for a second straight day, with the June contract GCM21 rising $5.90, or 0.4%, at $1,773.10 an ounce, adding to its climb after touching its highest level in seven weeks.
- In Europe, the Stoxx 600 index SXXP rose 0.6%, while London’s FTSE 100 UKX was gaining 0.5%.
- In Asia, the Shanghai Composite SHCOMP rose 0.8%, Hong Kong’s Hang Seng HSI closed 0.6% higher, and Japan’s Nikkei 225 NIK picked up 0.1%.