Tech Stocks Lead Market Higher Monday
A big move from some outsized players late in Monday’s session led three of the four major indexes into the green by the closing bell. Led by an 8% jump in Amazon AMZN shares (on no actual news relating to the company; Amazon does not report Q2 earnings until a week from Thursday) and another +9.5% for Tesla TSLA, which reports Wednesday afternoon, we see a new Nasdaq all-time high: up 2.5% to 10,767.
The S&P 500 — which many analysts expect Tesla will join at long last, following an earnings beat in a couple days — gained 0.84% to finish back in positive territory for the year to 3251, with the Dow barely squeaking positive by 0.03% to 26,680, but finished in the green for the first time in the last three sessions. Only the small-cap Russell 2000 ended the day lower: -0.36% to 1468.
We do know that Tesla had outperformed expectations on its Q2 deliveries, which had reported earlier, but with shares up now more than 50% on the month, it would appear Elon Musk’s leading electric vehicle maker is priced for a perfect quarterly report. As for Amazon, it’s anyone’s guess how the company has fallen back into favor with traders. A weaker series of sessions last week may have pushed valuations to more attractive levels, but the stock is up 68% year to date.
We did get an earnings report after the market close Monday from IBM Corp. IBM, which beat on earnings again — IBM has not posted a negative earnings surprise in almost 6 full years — and outperformed the Zacks consensus on the top line, as well. Earnings of $2.18 per share beat the $2.14 our analysts were expecting, though down roughly 30% year over year, while sales of $18.12 billion surpassed the $17.71 billion anticipated, lower by about 5% from the year-ago quarter. This is also the 8th straight quarter IBM has posted negative revenue growth.
IBM continues to show growth in its A.I. business as well as its cloud-based solutions, with nearly 1.3 of all company revenues per quarter now being generated in the cloud. Guidance was not reinstated for Q3 earnings season, but this has not kept late-day investors from bidding the stock up more than 6% in extended trading Monday afternoon.
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