ECONOMIC SILUET: Dow jumps 300 points | Small caps rally over 2%

Rabu, 21 April 2021

Dow jumps 300 points | Small caps rally over 2% | Strong earnings priced in?

WED, APR 21, 2021

EVENING BRIEF

AS OF WED, APR 21, 2021 • 05:04 ET

DJIA		34137.31
		+0.93%	+316.01

S&P 500		4173.42
		+0.93%	+38.48

NASDAQ		13950.22
		+1.19%	+163.95

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	133.50	+0.39	+0.29%
MSFT	260.58	+2.32	+0.90%
INTC	63.70	+1.00	+1.59%

S&P 500
NAME	LAST	CHG	%CHG
AAPL	133.50	+0.39	+0.29%
VIAC	40.85	+2.93	+7.73%
F	11.73	+0.28	+2.45%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	133.50	+0.39	+0.29%
AMD	81.61	+2.34	+2.95%
TSLA	744.12	+25.13	+3.50%

EDITOR'S NOTE

The stock market halted a two-day losing streak on Wednesday, as investors bought the dip in reopening plays such as airlines and cruise operators.

The S&P 500 rose 0.9%, while the Dow Jones Industrial Average gained more than 300 points. The tech-heavy Nasdaq Composite advanced 1.2%, even as Netflix dropped more than 7% after a big subscriber miss. The small-cap Russell 2000 outperformed with a 2.4% rally.

Shares of Norwegian Cruise Line led a pop in names that stand to benefit the most from the economic reopening after Goldman Sachs upgraded the stock. Norwegian jumped more than 10%, while competitors Carnival and Royal Caribbean rose over 4% each. United Airlines also rebounded 3% after an 8% decline in the previous session.

So far, traders have shrugged off solid first-quarter results as companies that topped earnings estimates have actually averaged a one-day drop of 0.62% in their shares, according to data from Bespoke Investment Group. That's a far cry from the long-term average gain of 1.86% following earnings beats over the last 15 years.

Considering that the S&P 500 is trading more than 22 times forward earnings, which is near the highest level since 2000, even blowout numbers can't justify the sky-high valuations. Many analysts are focused on the outlook companies are willing to give as they continue to recover from the coronavirus pandemic.

"It appears the economy is now well on its way to recovery. Still, earnings guidance early in the current reporting season appears to lean more conservative than our economic projections suggest," said Scott Wren, Wells Fargo's senior global market strategist.