Strong Rally Continues for U.S. Stock Market & 63% of Companies Beat Earnings Estimates

The U.S. stock market continued its rally this week, with the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) advancing 0.2% and 0.9%, respectively. The tech-heavy Nasdaq Composite (^IXIC) fared the worst, losing 1.0%.[0] This follows a mixed week of market performance, with the Dow Jones Industrial Average (DJIA) edging down 0.2%, the S&P 500 (SPX) falling 1.1%, and the tech-heavy Nasdaq Composite (^IXIC) losing 2.4%.

Treasury yields also rose this week, with the 10-year Treasury yield (US10Y) increasing 6 basis points to 3.75% and the 2-year yield (US2Y) increasing 2 basis points to 4.53%. The 10-year Treasury’s yield increased by five basis points, bringing it to 3.68%.

The U.S. stock market opened the day modestly higher following positive earnings reports and a decline in bond yields. Stock futures were pointed mostly higher, with the Dow Jones Industrial Average (DJIA) slightly below breakeven and the Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) futures pointed firmly higher.

West Texas Intermediate crude oil rose 1.35% to $74.38 per barrel and Brent crude, the international benchmark, tacked on 1.63% to hit $81.24.[1]

Thus far, 63% of the constituents of the S&P 500 index have reported their fourth-quarter earnings.[2] Data from FactSet reveals that 69.5% of those companies have exceeded analyst predictions.[3] Data from The Earnings Scout shows that the beat rate is under the three-year average of 79%.[3]

Top stocks to buy and watch include Visteon (VC), Etsy (ETSY), Wingstop (WING), Caterpillar (CAT), and JPMorgan Chase (JPM).[4] Investors should also keep an eye on top growth stocks including Tesla (TSLA) and Apple (AAPL).

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0. “Nasdaq, S&P, Dow look for direction, set to end lower for the week on Fed concerns” Seeking Alpha, 10 Feb. 2023, https://seekingalpha.com/news/3934862-nasdaq-sp500-dow-jones-stock-market-fed-earnings

1. “Dow Jumps Over 300 Points, Dollar Surges in Midday Trading” msnNOW, 13 Feb. 2023, https://www.msn.com/en-us/money/markets/dow-jumps-over-300-points-dollar-surges-in-midday-trading/ar-AA17radT

2. “Stock market news today: Rising interest rates help spoil early gains” Markets Insider, 9 Feb. 2023, https://markets.businessinsider.com/news/stocks/stock-market-news-today-rising-interest-rates-highest-level-november-2023-2

3. “Dow closes nearly 250 points lower, Nasdaq sheds 1% as Alphabet shares slide: Live updates” CNBC, 9 Feb. 2023, https://www.cnbc.com/2023/02/08/stock-market-futures-open-to-close-news.html

4. “Dow Jones Rallies 250 Points After Jobless Claims; Tesla Stock Doubles From Lows” Investor’s Business Daily, 9 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-rise-ahead-of-jobless-claims-disney-surges-on-earnings/