Dow futures rise more than 160 points as stocks go for 4-day winning streak
23 Jul 2021
A Specialist trader works inside a booth on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021.
Brendan McDermid | Reuters
Stock futures rose Friday, as the major averages tried to post their fourth straight day of gains, overcoming concerns about economic growth earlier in the week.
Futures on the Dow Jones Industrial Average gained 165 points, or 0.5%. S&P 500 futures rose 0.5%. Nasdaq 100 futures climbed about 0.5%.
The 10-year Treasury yield rose on Friday to 1.29%, easing concerns about the economy that the bond market triggered on Monday. The 10-year yield fell to a 5-month low of 1.13% earlier this week.
Strong earnings from tech stocks made investors optimistic ahead of reports next week from the biggest names in the sector. Twitter and Snap each jumped Thursday following better-than-expected second-quarter earnings reports. Twitter traded more than 5% higher in the premarket, while Snap shot up 16.4%.
Facebook gained 2% in premarket trading on the results from its social media competitors. Alphabet added about 1%. Both report next week along with Apple, Microsoft and Amazon.
The major U.S. indexes closed Thursday’s regular trading session higher to notch a three-day win streak. The Dow rose 25.35 points, or 0.07%. The S&P 500 climbed 0.2% higher. The tech-heavy Nasdaq Composite led the markets with a 0.36% gain.
All three U.S. stock averages are on pace to close the week in the green, rebounding from last week’s losses and Monday’s sharp sell-off. The Dow dropped more than 700 points to start the week as yields fell, unnerving equity investors about the economy.
Now the average heads into Friday with a 0.4% gain for the week and is back to within 1% of a new record. The S&P 500 is up 0.9% for the week and the Nasdaq Composite is up 1.8%. Both are also within 1% of the a record.
Tech shares led the way on Thursday and looked set to do so again Friday. Microsoft had the most positive impact on the S&P 500 and the Nasdaq on Thursday; the stock closed 1.7% higher. Salesforce had the greatest positive impact on the Dow as the software stock gained 2.6% on Thursday.
The strength in tech shares also comes with the continued spread of the highly contagious delta Covid variant.
“We saw during the depths of the pandemic that tech stocks and their earnings held up the best, so I think a lot of investors are going back to the well, given we have a Covid resurgence,” Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said. “Long term interest rates coming down as much as they have also makes those stocks more attractive.”
The stock market overall has been bolstered by a strong earnings reporting season. With a quarter of the S&P 500 having already reported, profit growth for the second quarter is expected to come in at 76%, according to Refinitiv, the best growth since 2009. And profit margins have been holding up in the face of rising inflation. So far for the second quarter, companies are reporting average profit margins of 12.8%, according to S&P Global, above the historic range.
American Express, Honeywell and Kimberly-Clark report earnings before the bell Friday.