Traders working on the New York Stock Exchange (NYSE) today, Wednesday, April 21, 2021.
The S&P 500 hovered around its record Monday after a busy week of earnings reporting from the technology’s biggest hits.
The broad equity benchmark traded near the flatline after hitting an all-time high. The Dow Jones Industrial Average fell 70 points. The tech-heavy Nasdaq Composite rose 0.2% to hit a new intraday high.
One of the busiest weeks with results reporting is on deck, and Tesla is kicking off after the closing bell. Last week, CEO Elon Musk said the automaker would likely accept bitcoin for vehicle purchases again. The electric vehicle maker’s shares rose 2.4%.
Big tech giants Apple, Alphabet and Microsoft will be reporting on Tuesday, and Google, Facebook and Amazon will be reporting later in the week as well.
The second quarter reporting season was stronger than expected, helping stocks climb back to record highs. So far, 88% of the S&P 500 companies have reported a positive EPS surprise, according to FactSet. If 88% is the final percentage, it is the highest percentage since FactSet started tracking this metric in 2008.
“US stocks remain resilient as they continue to climb the record wall of worry,” said Craig Johnson, chief market technician at Piper Sandler. “An impressive start to the earnings season has kept the buy-the-dip mood alive, offsetting concerns about peak growth and rising new cases of coronavirus.”
All three major averages closed at record highs last week after the market collapsed earlier this week amid concerns about the spread of the Delta variant of Covid and the potential hindrance to economic recovery.
Uncertainty caused bond yields to decline briefly and investors moved into tech stocks. Both bonds and stocks rallied quickly by the end of the week.
“Investors are concerned about the delta option’s impact on economic growth, but the new exposure shouldn’t pose a major market risk,” said David Kostin, head of US equity strategy at Goldman Sachs, in a press release. “Vaccinations, household and corporate stock demand, and attractive relative valuations will support capital inflows and prices.”
Also on Monday, Bitcoin surged above $ 39,000 for the first time since mid-June as sentiment turned bullish after a recent sell-off that pushed the cryptocurrency below $ 30,000.
On the data front, sales of new U.S. single-family homes unexpectedly declined in June, falling 6.6% to a seasonally adjusted annual rate of 676,000 units, the Department of Commerce said Monday. Economists polled by Dow Jones had expected new home sales to rise to 795,000 units in June.
Hong Kong stocks suffered heavy losses during Monday’s Asian trading session, with the city’s Hang Seng index plunging 4% as the government tightened technology crackdown.
Investors will be watching the Federal Reserve’s two-day monetary policy meeting starting Tuesday. The Federal Reserve Open Market Committee and Board of Governors are expected to issue a policy statement on Wednesday. On Thursday the Ministry of Commerce will publish the GDP data for the second quarter.