Earnings, Tax Reform Talk Help Dow Snap Weekly Losing Streak

Just as Wall Street was turning its attention to first-quarter earnings season on Monday, geopolitical concerns flared up, with U.S. Vice President Mike Pence announcing an end to the "era of strategic patience" with North Korea during his visit to the Asia-Pacific region. The Dow overcame these jitters to start the week with a big win, but the attention soon shifted to Europe, with U.K. Prime Minister Theresa May calling for a snap election, and the French election due this weekend. 

Dow, SPX, Nasdaq Stare Down Weekly Wins

When corporate earnings finally came into focus on Tuesday and Wednesday, traders were left disappointed, as Goldman Sachs Group Inc (NYSE:GS) announced surprisingly weak results. The Dow tumbled as a result, and wound up posting another triple-digit loss, after IBM stock sold off following the blue chip's quarterly report. Fortunately for bulls, stocks bounced back in a big way on Thursday, thanks to talk of "major tax reform" from Treasury Secretary Steven Mnuchin. As such, the Dow, S&P 500 Index (SPX), and Nasdaq Composite (COMP) are on pace to snap their two-week losing streaks. 

American Express, Visa Highlight Earnings Winners

While Verizon stock and Netflix stock also found themselves in a post-earnings swoon, there were plenty of winners to be found, including Lam Research and Intuitive Surgical. Blue chips finally got in on the bullish action toward the end of the week, with traders applauding strong results from American Express Company (NYSE:AXP) and Visa Inc (NYSE:V).

Facebook, McDonald's Stocks Rise to Record Highs

There were a number of notable movers outside the earnings circle, too. Facebook stock notched fresh record highs amid bullish analyst attention, while shares of Starbucks and Alibaba continued to push higher, too. McDonald's stock also broke out to record highs, while fellow blue chip Nike stock looks set to add to its recent gains. Plus, these two tech stocks could be flashing "buy" signals, while options data suggests this software stock could be on the verge of higher highs. 

Valeant Stock Slide Among Week's Worst

In what may not be a surprising development, embattled drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX) headlined this week's losers, with VRX shares hitting fresh lows. Another huge loser was Ocwen Financial Corp (NYSE:OCN), after the mortgage specialist was sued by regulators, while a $0 price target sank transportation stock Celadon Group, Inc. (NYSE:CGI). Elsewhere, a Food and Drug Administration (FDA) decision crushed drug stocks Eli Lilly and Incyte -- though the former could now be flashing a pre-earnings "buy" signal. Finally, the pharma sector will stay in focus moving forward, with plans for another Obamacare replacement in the works. 

Huge Options Trades on Texas Instruments, SPY

There was plenty of noteworthy options activity this week, as well. It was M&A buzz that had options bulls chasing Lululemon Athletica stock, and SPDR S&P Retail ETF (XRT) data suggests options traders are betting on a bounce from the retail sector as a whole. Another options bull bet millions on semiconductor stock Texas Instruments Incorporated (NASDAQ:TXN) ahead of earnings, hoping to emulate the success of the speculator who scored a $1.7 million profit on the Financial Select Sector SPDR Fund (XLF). But not all the options activity was bullish, as evidenced by this seven-figure options hedge. That said, you can make money trading options no matter which direction stocks are heading. 

Stock Market Data Mixed as Earnings Season Rolls On

The current sentiment backdrop is pretty interesting, too. Schaeffer's Senior Quantitative Analyst Rocky White noted unusually mixed messages from recent investor sentiment polls. On the one hand, Americans are more optimistic toward the stock market than they've been in roughly 17 years, yet the CBOE Volatility Index (VIX) remains elevated, and options traders continue to bet on an even bigger volatility spike in the months ahead. This, even as one Dow signal suggested investors may not want to "sell in May" this year. Either way, there should be even more action next week, with dozens of high-profile companies scheduled to report earnings.