The markets were higher today as a strong rally overnight in China gave markets a boost. Earnings were mostly positive today as well, but the season is just getting underway. The Dow 30 closed the day higher by 67, the S&P 500 added 1, and the Nasdaq closed the day higher by 24.
Tomorrow's earnings include more bank stocks like Morgan Stanley (MS ) and US Bank (USB ), along with casino operator Las Vegas Sands (LVS ) and Pepsi (PEP )
Sector News
Semiconductors (SMH ) popped back to new highs already this week thanks to strong moves in China and trade optimism as Treasury Secretary Steve Mnuchin says the trade deal is in its final stages. The sector got a strong boost late in the day thanks to a report that Qualcomm (QCOM ) and Apple (AAPL ) have settled their disputes and all pending litigation will cease. Qualcomm makes up about 5% of the SMH. Semiconductors, which are major pillars of the S&P 500, are now higher by over 30% on the year and remain in a clean, steady uptrend.
The tech sector (XLK ) also has enjoyed a move back to highs and is one of just a few sectors in the S&P 500 that has moved back to record levels. Last week tech was one of three sectors that broke to record highs thanks to a consistent push by the bulls to move into large cap tech stocks. For the year, the XLK is nearing 30% gains.
It's a big week for bank stocks (XLF ), which are slowly reporting their earnings for the first quarter. So far it's been a mixed bag, with mostly beats on earnings but misses on revenue thanks to slowing areas of the sector. Wells Fargo (WFC ) has seen the worst of it so far, including downgrades from four different analysts on Monday alone. Technical traders note the continued hesitation of the XLF to move out of the sloppy range that has been an issue all year long.
REITs (ICF ) have pulled back a little more sharply than previous weeks as interest rates have climbed off their lows. Many investors have been calling for a short-term top in REITs given its sharp rally. REITs were the first area of the markets to hit new highs, which left many looking for a short-term pullback to hop on.
Stock News
Bank of America (BAC ) was one of the latest banks to report earnings today, which came in better than expected. This continues their streak of not missing on earnings since Q1 2015. Shares moved lower on the day however as the CEO indicated challenging times ahead for the capital markets. They also missed just slightly on revenue, which left investors nervous about the rest of the year.
BlackRock (BLK ), the giant asset management firm, reported earnings that were much better than expected, beating by 48 cents along with revenue that matched expectations. Shares moved higher on the day and those new shareholders are now also entitled to a 5% increase in the dividend payout.
United Health (UNH ) shares started the day higher after reporting earnings that beat by 13 cents with revenue also ahead of estimates. The company issued guidance above Wall Street's expectations, which they don't always do. They cited their Optum Health division, which saw an uptick in memberships, as one of the reasons.
