US market weekly: S&P 500 ends higher amid mixed macro signals and upbeat quarterly results

US indices started off the week on a higher note on Monday, with the Dow and S&P 500 closing at record highs, as investors geared up for a week of earnings from some of the major tech bigwigs. All the three major indexes ended in positive territory.

U.S. stocks continued their winning streak on Tuesday, with the Dow and the S&P 500 closing at record highs for the second straight day as investors digested a slew of earnings reports from some of the biggest American corporations.

The US indices ended their winning streak to finish lower on Wednesday, as investors digested a slew of earnings from some of the tech giants. Also, U.S. Treasury yields pulled back, which weighed on cyclical stocks.

U.S. stocks ended higher on Thursday, with the S&P 500 and Nasdaq closing at record highs, as indications that Democrats in Congress might soon reach a budget deal helped lift investors sentiment.

US indices reported mixed results on Friday as investors digested disappointing earnings results from Apple and Amazon that came during an otherwise solid quarterly reporting season from many major companies. The consumer discretionary, energy and information technology sectors outperform during the month. For the week, S&P 500 ended 1.3% higher and Dow Jones 0.4% higher. 

Weekly market stats with IND

Let’s see the major developments during the week:

Upbeat earnings season: Despite some high-profile companies, including Amazon, Apple and Starbucks, missing earnings forecasts largely due to supply chain bottlenecks and labor shortages, third quarter earnings have overall been to the upside. With about 55% of S&P 500 companies having reported so far, third quarter earnings growth is up a robust 36% year-on-year, well ahead of the 28% growth predicted at the end of September. This upward revision in earnings has broadly supported the positive market tone.

Macroeconomics signals: The Commerce Department revealed its advance estimate that the economy expanded at an annualized rate of 2.0% in the third quarter, a sharp slowdown from the previous quarter’s 6.7% pace and below consensus estimates of roughly 2.7%. A decline in auto sales and a slowdown in spending on food services and accommodations due to the delta variant of the coronavirus were the major factors for this drag. Pending home sales also fell unexpectedly. On the bright side, weekly jobless claims fell modestly more than consensus to a new pandemic-era low of 281,000.

Delta variant remains a concern: The spread of the delta variant appears to have gradually slowed down as economic progress is coming back on track.  An average of roughly 72,766 coronavirus cases have been reported each day in the United States while the total cases have crossed the 45.9 million mark. However, to battle this, the pace of vaccination has also picked up. About 58% of the eligible American population (age 12 and over) are fully vaccinated and over 67.2% have received the first dose.

Oil prices rise: U.S. crude prices edged higher on Friday, turning positive after an early decline, supported by expectations that OPEC, Russia and their allies, would maintain production cuts.

Brent crude settled 0.07% higher at $84.38 per barrel and U.S. West Texas Intermediate crude rose 0.92% to $83.57. Both benchmarks touched multi-year highs.

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