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  • Writer's pictureKevin Hurley

Marketbites: Market Rally Not Just From Big Tech


Portfolio Manager Commentary:

The Dow Jones Industrial Average Friday as strong earnings results from some of the biggest banks and companies kicked off earnings season. Wall Street is coming off its fourth consecutive day of gains, with the Nasdaq and S&P 500 reaching their highest levels since April 2022. UnitedHealth shares jumped 7% after the insurance giant reported better-than-expected earnings and revenue. The company also raised the lower end of its full-year earnings guidance.

JPMorgan Chase rose 0.6% after its second-quarter earnings topped expectations. The bank was boosted by higher interest rates and rising interest income. Wells Fargo inched down 0.3%, even though the bank posted better-than-expected results. “What we’ve seen out of big bank earnings, especially JPMorgan, is pretty resilient,” said Scott Ladner, chief investment officer at Horizon Investments.

Expectations for this season are downbeat, with analysts forecasting a roughly 7% year-over-year drop in S&P 500 earnings, according to FactSet. That would mark the worst earnings season since the second quarter of 2020, when S&P 500 profits dropped 31.6%.

Chart of the Day:

The stock market rally is no longer just a big tech rally. Just a couple months ago, the seven largest tech companies in the U.S. were responsible for virtually all of the stock market’s 2023 gains. Eye-popping returns from shares of companies like Apple, Microsoft and Nvidia propelled the S&P 500 into a new bull market. The tech behemoths became so dominant that they earned a fresh moniker: the “Magnificent Seven.” Now, shares of many companies are making the rally broader. More than 130 stocks in the index have hit fresh 52-week highs since the end of May, such as Lowe’s and General Electric. All 11 sectors of the S&P 500 have climbed during that period, pushing the index upmore than 17% for the year.

Source: WSJ

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