Tech Stocks Steal Show Friday

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Stocks rose Friday with a huge lift from FANG stocks which reported strong earnings. 

The S&P 500 rose a tenth of a percentage point, lifted by the Nasdaq, which rose 0.94%. The 10-Year Treasury yield was flat at 0.55%. It’s been pressured of late, a bearish sign on the economic recovery. 

Apple  (AAPL) - Get Report, Facebook  (FB) - Get Report, Amazon  (AMZN) - Get Report and Google  (GOOGL) - Get Report all reported revenue and earnings better than expectations. with most companies giving strong guidance. The slowdown in ad spend as a result of the virus-plagued second quarter was not as steep as analysts had predicted and Facebook offered a slightly brighter outlook on ad spend for the second half of the year than analyst had expected. Google’s outlook was less certain and the stock fell 3.6%. The stock had run up into earnings.  

From Ponsi Charts: Amazon Traders Should Watch This Level

But Apple, Facebook and Amazon rose 6.5%, 7.8% and 4.7%, respectively. With an outsized weighting in the S&P 500, these stocks can power the market if earnings day is a good one. 

The strength in the quarter for big tech reflects a tailwind from the at-home environment for e-commerce, cloud and Apple’s various services, while slightly more cyclical ad business is holding in. 

The optics of the market were strong on Friday because of tech, but other areas of the market were suffering. 

Large cap oil, banking and consumer discretionary were all down around 1%, even as consumer spend for June rose about 6%. That reflects unprecedented monetary and fiscal stimulus and state reopenings. 

But looking forward, the economic recovery looks to be weakening, as states pause reopenings and the virus spreads wildly in the U.S. Strong earnings reports from cyclical sectors have supported these stocks in July, but they have not gotten momentum, as the earnings outlook still looks dim. 

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