The S&P 500 climbed to fresh highs, led by a jump in communication services after strong quarterly results from social media companies set the stage for Google and Facebook to rally to records.
The S&P 500 rose 1.01% to a record intraday high of 4,413.40.The Dow Jones Industrial Average gained 0.62%, or 215 points, the Nasdaq was up 1.05%.
Facebook (NASDAQ:FB) rallied 6% and Google-parent Alphabet (NASDAQ:GOOGL) gained 4% to notch record highs ahead of their quarterly results due next week. The bid up in social media companies comes as better-than-expected quarterly results from Twitter and Snap pointed to a strong backdrop for advertising spend.
Twitter (NYSE:TWTR) rallied 4% after reporting revenue growth of 74% year-over-year, its fastest growth since 2017.
“[W]e are bullish on advertising momentum heading into 2H, led by strong demand across large advertisers, evidenced by 3Q guidance being 8% above Street expectations,” Oppenheimer said as it raised its price target on Twitter to $85 from $70.
Snap (NYSE:SNAP) jumped 24% as a ramp up in users and advertising revenue led to second-quarter results that beat analyses expectations on both the top and bottom lines.
Apple Inc (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) were also in the ascendency ahead of their quarterly results due next week.
Intel (NASDAQ:INTC), however, proved a drag on the semiconductor sector after the chipmaker reported results that topped Wall Street expectations, but guidance on quarterly revenue fell short of expectations, sending its shares more than 6% lower.
“[The] bears will question the increased magnitude of the implied decline in GMs [gross margins], while also pointing to concerns around PCs, with client computing group, needing to decline through the remainder of the year to offset the forecast pickup in data center group,” Wedbush said as it lowered its target price on Intel to $50 from $53.
Financials, meanwhile, were underperforming relative to broader market as banking stocks continued to be shunned despite a rise in yields.
Concerns about the outlook on the economic recovery had sent yields spiraling earlier this week, with the 10-year falling below 1.14%.
Data released Friday, showing a rise in manufacturing activity, and weaker-than-expected services activity continued to muddy the outlook.
Energy was the sole sector in the red, paced by a decline in ConocoPhillips (NYSE:COP), though downside was limited by steading oil prices.
Oil prices dropped sharply this week, driven by concerns about “renewed demand-dampening mobility restrictions due to the strong spread of the delta variant of coronavirus,” Commerzbank (DE:CBKG) said. “The demand concerns proved to be exaggerated, which is why oil prices have since recovered." Investing.com