The stock market opened lower on Friday but later turned positive after shares of Apple, Amazon and Facebook soared following better-than-expected second quarter earnings results.
The Dow Jones Industrial Average was up 0.4%, over 100 points, on Friday, while the S&P 500 rose 0.8% and the tech-heavy Nasdaq Composite gained 1.5%.
The Dow fell by nearly 300 points earlier in the day, but the market recovered and turned positive thanks to continued strength in Big Tech stocks.
Three of the biggest U.S. tech companies—Apple, Amazon and Facebook—reported earnings and revenue that crushed Wall Street expectations late on Thursday.
Apple rose 10% to a new all-time high on Friday, boosting the market higher, while also announcing a 4-for-1 stock split that was cheered by investors.
While shares of Big Tech companies are among the best-performing stocks so far this year, there are rising concerns on Wall Street that heavy market concentration in this handful of big names could pose downside risks to the market.
Consumer sentiment fell to 72.5 in July—down from 78.1 last month—amid the resurgence in new coronavirus cases across the country, according to data from the University of Michigan.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise stocks, banks and some retailers—moved lower again on Friday.
“These earnings from big tech and communication names are simply amazing,” says Ryan Detrick, chief investment strategist for LPL Financial. “Yes, estimates were low and we all assumed they would beat, but this is another sign that the strong have only gotten stronger.”
Gold prices topped $2,000 per ounce on Friday, a new record high. Investors have continued to pile into safe haven assets like gold amid the economic uncertainty caused by the coronavirus pandemic.
What to watch for
Emergency federal unemployment benefits, which were being paid out at $600-per-week, are set to expire Friday. Congress and the White House remain deadlocked over a new coronavirus stimulus bill, which means that there could be significant delays before a new unemployment insurance program is up and running.
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