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Stocks climbed on Friday, as a series of economic data points beat forecasts and companies continued to report quarterly results.
The
was up 60 points, or 0.2%. The
was up 0.5%. The
rose 0.8%.
A handful of economic reports provided more evidence that U.S. growth is rebounding quickly from last year’s pandemic slowdown. Markit’s preliminary surveys of manufacturing- and service-sector activity indicated stronger growth than expected by economists polled by FactSet. New home sales data also beat estimates.
U.S. companies continue to report earnings, and there are signs that investors’ expectations may have been too high. So far, more than 20% of reporting companies have seen their stocks fall at least 5% on earnings day, while only around 15% of companies saw their stocks climb more than 5%, according to Leuthold Group.
“A curious finding is that the percentage of large positive movers remains near a decade low even as the economy roars ahead, while the number of big negative movers recently leapt higher,” wrote Leuthold senior analyst Jun Zhu in a Friday note.
Thursday saw selling as news broke that President
Joe Biden
would propose a capital-gains tax increase on wealthy individuals. This would lower the after-tax return in stocks, making them less attractive. Investors have shown a tendency to buy shallow dips for months.
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“The big problem (one of many) in all this is the Senate—it would require support of all the Democrats in the upper chamber and this is far from assured,” said
Neil Wilson,
chief market analyst at Markets.com, of the potential wealth-tax increase, in a note to clients.
“Nevertheless, coming off record highs and a good run up through the start of the year, the macro picture not really changing, rising Covid cases globally, strong earnings and other supportive factors largely priced in and the extent to which investors are ‘all in’ equities, we could be set for a downward move in equities over the coming weeks,” said Wilson.
In Asia, the Hong Kong Hang Seng stood out with a 1.1% gain, while the Nikkei 225 index slipped 0.6% and stocks in India fell 0.4%. Soaring Covid-19 infections and a lack of oxygen tanks continued to overwhelm Indian hospitals. In Europe, the Stoxx Europe 600 was down 0.5% and headed for its first weekly loss in eight weeks, despite upbeat purchasing managers index data.
The price of Bitcoin and other cryptocurrencies were under pressure on Friday, with some pointing to tax worries, but also as steam continues to come out of that market following
direct listing more than a week ago. Bitcoin was trading around $49,087 and below the psychologically important level of $50,000 for the first time since early March.
Shares of
(ticker: COIN) erased early losses to trade 0.2% higher.
Shares of Snapchat parent
climbed 5.2% after the social-networking group reported better-than-forecast results for the March quarter.
Shares of
were down 6.7%, even after as the U.S. chip maker reported forecast-beating earnings, as the company sold more chips for personal computers, but revenue for its key data center fell.
(MAT) shares jumped 7%, after the toy maker posted a narrower-than-expected quarterly loss and a surge in sales of nearly 50%.
(SKX) shares were up 13% after the company posted earnings per share of 63 cents, beating expectations of 49 cents on revenue of $1.43 billion, which beat estimates of $1.35 billion.
(SAM) saw its stock rise 3.5% after it said it earned $5.26 per share, higher than the estimated $2.61. The company said net revenue was $545 million, beating expectations of $477 million.
(EA) shares rose 0.3% after Jefferies upgraded the stock to Buy from Hold.
(HOG) shares fell 1.5% after Morgan Stanley downgraded the stock to Under Weight from Equal Weight.
Write to Alexandra Scaggs at alexandra.scaggs@barrons.com and Jacob Sonenshine at jacob.sonenshine@barrons.com
