By Yasin Ebrahim
Investing.com – The Dow jumped Friday, led by financials and tech stocks ahead of the busiest week of corporate earnings that could set market direction for weeks to come.
Financials were pushed higher by a surge in the regional banking stocks as the wave of better-than-expected earnings for the sector continued, supported by a reflationary environment.
SVB Financial Group (NASDAQ:SIVB) led the pack, up more than 8%, after its first-quarter results topped analysts’ expectations, prompting several upgrades from Wall Street.
“The company positively revised its 2021 expectations that suggest robust balance sheet growth, modestly growing fee trends, revenue driven expense growth, and some incremental margin pressure,” RBC said in a note as it lifted its price target on the stock to $590 from $560.
In technology, big tech recovered losses from a day earlier as investors took advantage of the recent selloff ahead of the busiest earnings week, with 33% of Dow and S&P 500 companies set to report quarterly results.
Intel (NASDAQ:INTC) fell more than 5% after it beat first-quarter estimates and raised its guidance, but the sharp pace of recovery in its stock price ahead of the report was perhaps too much too soon, according to some on Wall Street.
Intel is “mostly doing the right things … but results will be painful over an elongated period as revenues suffer from past missteps, and costs increase as Intel invests in its turnaround strategy,” Wedbush said. “Net, our view remains that the stock recovered too much/too quickly and we continue to see near-term downside from current levels.”
Snap (NYSE:SNAP), meanwhile, ended up 7% after social media company topped analysts’ estimates on better-than-expected user growth.
The strong rebound for Wall Street comes just a day after markets were roiled by news that Biden is set to propose doubling the capital gains tax on wealthy Americans.
On the pandemic front, worries over rising global cases intensified after infections in India jumped to a one-day record, and Japan declared its third state of emergency in Tokyo.
In other news, Skyworks Solutions (NASDAQ:SWKS) said it would acquire the infrastructure and automotive business of Silicon Labs in a deal worth $2.75 billion.
The bullish day on Wall Street comes ahead of the Federal Reserve decision on Wednesday.
“Fed Chair Powell will likely reinforce previous guidance for rate hikes, and push back against tapering, emphasising that there has not been “substantial progress”, and that the Fed will provide plenty of notice before tapering,” National Australia bank said.
Dow Climbs Ahead of Busiest Earnings Week as Financials, Tech Rally
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