Wall Street looked like it was going to close the week in tame fashion, but buyers rushed in during the final hour to send all the major indices to strong gains.
The Commerce Department reported Friday that personal income declined by 7.1% in February, slightly better than the 7.3% drop economists were expecting in a month with storm disruptions, fewer working days and no stimulus checks.
However, consumer spending declined 1% last month, undershooting estimates of a 0.7% decline – but that should snap back in March thanks to outgoing stimulus checks.
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The Dow Jones Industrial Average (+1.4% to 33,072) and the S&P 500 (+1.7% to 3,974) were both en route to modest gains, and then a final-hour rally propelled them to new all-time highs. The industrial average was led by Cisco Systems (CSCO, +4.1%), Nike (NKE, +3.4%) and Intel (INTC, +4.6%).
The latter joined in a broad semiconductor rally that included Qualcomm (QCOM, +4.5%), Broadcom (AVGO, +4.4%) and Texas Instruments (TXN, +5.4%) to help the Nasdaq Composite (+1.2% to 13,138) flip from red to green in the late afternoon.
Other action in the stock market today:
- The small-cap Russell 2000 rocketed 1.3% higher to 2,211.
- Tesla (TSLA) declined 3.4% despite CEO Elon Musk's best efforts to prop it up – Musk tweeted there's "a >0% chance Tesla could be the biggest company," then followed it up with another tweet saying "Probably within a few months" that he quickly deleted.
- Comcast (CMCSA, -2.0%) dropped after DAZN Group, known as "the Netflix of sport," outbid Comcast's Sky division for a major Italian soccer contract.
- U.S. crude oil futures sprang back again, jumping 4.8% to settle at $61.35 per barrel.
- Gold futures edged 0.4% higher to $1,732.30 per ounce.
- Bitcoin prices joined the rally as well, climbing 3.2% to $53,832. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
One Bright Outlook for the Next Few Months
More encouragingly, the first-quarter earnings season will soon be upon us, and corporate America is expecting it to be a doozy. John Butters, senior earnings analyst at FactSet, notes that 60 S&P 500 companies have issued positive earnings per share (EPS) guidance for the first quarter.
"If 60 is the final number of S&P 500 companies issuing positive EPS guidance for the quarter, it will mark the highest number of S&P 500 companies issuing positive EPS guidance for a quarter since FactSet began tracking this metric in 2006," he says. "The current record is 57, which occurred in the previous quarter (Q4 2020)."
It could be an especially good quarter for tech stocks, as the sector leads the way with 29 companies issuing positive guidance.
Analysts are bullish on the sector, too, rating 61% of the S&P 500's tech stocks as Buys – but they feel equally as strong about energy, which has surged over the past few months, and healthcare.
While not as flashy as tech and not as recently en vogue as energy, healthcare is a favorite among buy-and-hold investors given the sector's ability to provide performance in bull and bear markets. Particularly attractive on this front are the sector's Big Pharma names, which provide not just stability, but typically well-above-average yields.
Read on as we explore seven large pharmaceutical stocks that are mostly just churning along with little fanfare, but that income investors can always appreciate.
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