Record Highs in Tech Stocks Help Lift Market in the Second Quarter

The US stock market gained some momentum on Friday on the hopeful economic data.  For the second quarter, the US economy grew more than 2 percent, which is down 100 basis points from 3.1 percent, last quarter. Still, the Dow Jones Industrial Average gained 0.19 percent, to 27,192, while the Standard & Poors index grew 0.74 percent, to 3,025, and the Nasdaq Composite Index increased by 1.11 percent, to 8,330.  

As a matter of fact, both the S&P 500 and the Nasdaq Composite reached for record highs to close out the week. And with only about half of S&P companies releasing their earnings report—and three-quarters of those beating profit forecasts, two-thirds beating revenue estimates—the outlook is quite optimistic. 

On that, Intel Corporation showed a 1 percent downward trend during the second-quarter. Intel posted earnings of $1.06 per share on revenue of $16.5 billion. This reflects a decline of 2.7 percent over the same period last year.  Overall, the company beat earnings expectations by 22 cents and revenue expectations by $800 million.  

Effectively, CEO Bob Swan comments, “Second-quarter results exceeded our expectations on both revenue and earnings, as the growth of data and compute-intensive applications are driving customer demand for higher performance products in both our PC-centric and data-centric businesses.  Based on our outperformance in the quarter, we’re raising our full-year guidance.” 

Intel now looks to reach revenue of $69.5 billion by year’s end, a $500 million bump from its previous target.  Furthermore, projected earnings per share should reach $4.10, bringing total guidance for non-GAAP earnings to $4.40 per share (up from a previous rating of $4.35).

Intel, of course, is not the only firm to come out ahead this round. Boosts to the market also came as the result of jumps from MGM Resorts International (NYSE:  MGM), T-Mobile US Inc (NASDAQ: TMUS), Fiserv INC (NASDAQ: FISV), Starbucks (NASDAQ: SBUX) and Universal Health Services Inc all up between 3.8 and 10.8 percent.