Wall Street closed sharply higher on Friday buoyed by strong second-quarter earnings results. Market participants concern over higher inflation and slowing global growth due to the highly infectious Delta variant of COVID-19 virus were more than offset by soaring profits of corporate America. All the three major stock indexes ended at record high levels. For the week as a whole, these indexes finished in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 0.8% or 238.20 points to close at 35,061.55. Notably, 24 components of the 30-stock index ended in the green while 6 in red. This was the first ever closing of the blue-chip index above a key technical barrier of 35,000. In intraday trade, the index recorded an all-time high of 35,095.33.
The tech-heavy Nasdaq Composite finished at 14,836.99, climbing 1% or 152.39 points due to strong performance by large-cap technology stocks. The teach-laden index has registered a new closing high. In intraday trade, the index posted an all-time high of 14,846.06.
Meanwhile, the S&P 500 moved up 1% to end at 4,411.79, marking a new closing high. In intraday trade, the benchmark index recorded an all-time high of 4,415.18. The Communication Services Select Sector SPDR (XLC), the Utilities Select Sector SPDR (XLU), the Consumer Staple Select Sector SPDR (XLP) and the Health Care Select Sector SPDR (XLV) surged 2.8%, 1.3%, 1.2%, and 1.2%, respectively . Ten out of eleven sectors of the broad-market index closed in green while one in red.
The fear-gauge CBOE Volatility Index (VIX) was down 2.8% to 17.20. A total of 9.72 billion shares were traded on Friday, lower than the last 20-session average of 10.14 billion. Advancers outnumbered decliners on the NYSE by a 1.59-to-1 ratio. On Nasdaq, a 1.03-to-1 ratio favored advancing issues.
Impressive Q2 Earnings Results
As of Jul 23, 120 companies of the S&P 500 Index reported results. Total earnings of these companies were up 118.9% year over year on 18.4% higher revenues. Moreover, 89.2% of these companies beat their earnings per share (EPS) estimates and 85% surpassed revenue estimates.
For the second quarter as a whole, total earnings of the S&P 500 Index are expected to be up 74.3% year over year on 20% higher revenues. This indicates an improvement over the initial projection of EPS increasing 62.2% from the same period last year on 18.2% higher revenues.
Twitter Inc. TWTR reported adjusted earnings of $0.20 per share that beat the Zacks Consensus Estimate by 185.7%. Revenues surged 74% year over year to $1.19 billion and surpassed the Zacks Consensus Estimate by 12.1%. The top-line growth was driven by strength in brand advertising as well as accelerating year-over-year growth in Mobile App Promotion revenues. (Read More)
Snap Inc. SNAP reported adjusted earnings of $0.10 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. Revenues jumped 116.2% from the year-ago quarter to $982.1 million, surpassing the consensus mark by 17.1%. The top-line was benefited from increasing ARPU and user base growth. Daily active users at the end of the reported quarter were 293 million, up13 million sequentially. (Read More)
Consequently, shares of Twitter and Snap jumped 3.1% and 23.8%, respectively. Snap carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Last week was an interesting one in Wall Street. On Monday, U.S. stock markets plunged. The Dow recorded its worst single-day decline since October 2020 while both the S&P 500 and the Nasdaq Composite posted biggest single-day drop since May 2021.
Resurgence of the highly infectious Delta variant of the coronavirus and mounting inflation in the United States raised severe concerned about global economic recovery. However, in the subsequent four days, Wall Street rebounds strongly supported by the impressive start of the second quarter earnings season.
Finally, the three major stock indexes - the Dow, the S&P 500 and the Nasdaq Composite - gained 1.1%, 2% and 2.8% in last week. The small-cap centric Russell 2000 also rallied 2.1%.
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