Dow, S&P 500 Log Fresh Record Highs as Earnings Season Charges On

The S&P 500 strung together a seven-day win streak

Deputy Editor
Oct 22, 2021 at 1:25 PM
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Both the Nasdaq and S&P 500 logged a fourth-straight win on Monday, as investors eyed a jam-packed earnings week. A lackluster gross domestic product (GDP) reading out of China, combined with a worse-than-expected U.S. industrial production decline for September, kept sentiment in check, however, and the Dow logged a loss for the day. A round of upbeat earnings reports boosted the markets on Tuesday, with the Dow scoring a triple-digit pop, while the S&P 500 and Nasdaq extended their win streaks for a fifth session. Several blue chips took the spotlight, with Travelers (TRV), Johnson & Johnson (JNJ), and Procter & Gamble (PG), all posting better-than-expected quarterly profits.

Tailwinds continued to blow in on Wednesday. The Dow surged to a fresh intraday peak and notched its second-highest close on record, while the S&P 500 walked away with its sixth-consecutive daily gain. Bitcoin (BTC) also extended its rally, surging to record highs after Paul Tudor Jones named the cryptocurrency as his preferred inflation hedge over gold. Meanwhile, the Nasdaq snapped its win streak. The Dow cooled slightly on Thursday thanks to a disappointing earnings report from IBM (IBM), but the S&P 500 took its turn in the spotlight, stringing on a seventh-straight pop and notching a record close. By midday today, it looks like stocks are taking a breather, though all three indexes are pacing for weekly wins

Blue Chips Making Big Moves This Week

This was a big week for blue chip stocks, as earnings rolled in and a slew of analyst updates showed up in the headlines. Walt Disney (DIS) was one name analysts were paying attention to, after Barclays downgraded it to "equal weight," noting a slow-down in its streaming service. Walmart (WMT) was the recipient of more positive analyst attention, getting a boost after Goldman Sachs put the retailer on its "Conviction Buy" list. On the earnings front, IBM (IBM) took a tumble after a third-quarter revenue miss. Meanwhile, UnitedHealth (UNH) just ran into a historically bullish technical signal that might make the healthcare stock worth watching

Airline Stocks Taking Flight After Earnings

Several travel names stepped into the earnings confessional this week. Two flight sector members in particular were United Airlines (UAL) and American Airlines (AAL). The former rose after posting a smaller-than-expected third-quarter loss, while the latter also enjoyed a top- and bottom-line beat. Meanwhile, another name tied to the economic reopening, Urban Outfitters (URBN) got a boost after Citigroup commended the stock's risk-reward profile. On the opposite side of the spectrum, pandemic-era darling Zoom Video Communications (ZM) made one analyst's radar. J.P. Morgan Securities earlier today called the tech stock's bottom, upgrading it to "overweight" from "neutral." 

Last Week of October Brings Slew of High Profile Earnings

The month of October comes to an end next week, but traders will have no shortage of economic indicators to digest. Specifically, they will be sifting through a new consumer confidence index, new and pending home sales data, as well as durable and core capital goods orders.
 
The usual round of jobless claims, the personal consumption expenditures (PCE) price index, and the employment cost index are also due. As for earnings, several big names are set to report, including 3M (MMM), Alphabet (GOOGL), Caterpillar (CAT), Chevron (CVX), Coca-Cola (KO), eBay (EBAY), Facebook (FB), Microsoft (MSFT), and Twitter (TWTR). Until then, see what this sentiment indicator could mean for the S&P 500, and why investor pessimism may have reached its peak.

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