The Dow registered its 35th record close for 2017 on Monday, ending at an all time high, above the psychological 22,000 mark yet again. The Dow ended in the green for ten straight trading days, the highest since February. This has been possible due to a splendid earnings season, specifically from Goldman Sachs and Boeing, which contributed the most toward the blue-chip index’s stellar showing. The S&P 500 also closed higher as eight of its eleven primary sectors ended in the green. These gains were driven by a surge in the technology shares due to a rally in semiconductor stocks. The Nasdaq also ended in positive territory due to a surge in tech stocks. Broad based gains were also attributable to continuing impact of the record low unemployment reading released last Friday.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJIA) closed at 22,118.42, an all-time high, rising by 0.1% or 25.61 points in the process. The S&P 500 Index (INX) increased 0.2%, rising 4.08 points to close at 2,480.9. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,383.77, gaining 32.21 points or 0.5%. A total of around 5.29 billion shares were traded on Monday, above the last 20-session average of 6.13 billion shares. Declining issues outnumbered advancers on the NYSE by 1.08-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by a 1.07-to-1 ratio.
Dow and S&P 500 Post Stellar Showing
Both the Dow and the S&P 500 closed higher, mostly driven by a strong earnings season. In fact, eight of the eleven primary S&P 500 sectors ended higher, led by consumer staples and technology shares. The Consumer Staples Select Sector SPDR (XLP) gained 0.75%. The technology shares were boosted by a rally in the semiconductor stocks. The S&P has soared 11% so far this year, riding high on broadly encouraging economic conditions.
The Dow, on the other hand, has benefitted mainly from what has been a stellar earnings season. The blue-chip index rose 2.8% since February, with Boeing (BA - Free Report) and Goldman Sachs (GS - Free Report) contributing to the majority of the gains. The 30-stock index registered its 35th record close for 2017, ending yet again above the psychological 22,000 mark. The latest jobs report from the Labor Department has also boosted the overall markets.
Strong Second Quarter Earnings
With the season almost over, we are left with results from only about 16% of the S&P 500 members still awaited. In fact, the Retail sector is the only one at this stage that has a sizable number of reports still to come, with a number of traditional retailers on deck to report results. With another 35 index members reporting results this week, the Q2 earnings season will have come to an end for 91% of S&P 500 members by the end of the week. The second quarter turned out to be very good. The key positives include broad-based growth reaching double-digit level for the second quarter in a row, record earnings tally, an abundance of positive surprises and favorable trends on the revisions front.
This week brings in results from more than 700 companies, including 35 from the S&P 500 index. As of Friday, August 4, 2017, we have second quarter results from 420 S&P 500 members that combined account for 86.7% of the index’s total market capitalization. Total earnings for these companies are up 11.6% from the same period last year on 5.6% higher revenues, with 74.3% beating EPS estimates and 68.3% beating revenue estimates. But the earnings and revenue growth pace for these 420 companies is below what had been observed from the same sample of companies in the first quarter, although there has been an improvement over other recent periods. (Read Now)
According to the latest report from the Federal Reserve on Monday, total consumer credit increased at an annual rate of 3.9% in June. There was a decline from the growth rate in May, which exhibited the strongest performance for the year. Economists are expecting that an increase in consumer spending is likely to drive the growth in consumer credit for the remaining months of 2017.
Stocks That Made Headlines
CBS Corp Beats on Q2 Earnings & Revenue Estimates
CBS Corporation (CBS - Free Report) posted second-quarter 2017 adjusted earnings per share that beat the Zacks Consensus Estimate(Read More)
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