The S&P 500 Index gained 0.80 percent this week and the Nasdaq climbed nearly 2 percent following positive industrial, financial, technology and healthcare sector earnings. The Dow Jones Industrial Average advanced 0.50 percent.
General Electric (GE) earnings and revenues beat expectations, despite declining revenue in its oil services division. GE expects to finalize a deal mid-year to combine its oil and gas division with Baker Hughes (BHI). Honeywell (HON) also beat earnings on slightly lower revenue. Shares subsequently rose 2 percent. Shares of oil service giant Schlumberger (SLB) fell 2 percent on Friday after the firm met analyst expectations. Overall, the report signaled a rise in North American oil drilling, however, the expense of restarting idle equipment lowered SLB’s margins.
Bank of America (BAC) shares bounced after the firm reported earnings of $0.41 per share, well above estimates of $0.35 per share, and 40 percent higher than year-ago earnings. The bank’sincome climbed more than $800 million in the first quarter. Other financial earnings were solid this week, with the exception of Goldman Sachs (GS), whose trading division caused lower-than-expected earnings.
Healthcare earnings were also very strong this week. Johnson & Johnson (JNJ), Abbot Labs (ABT) and UnitedHealth Group (UNH) all beat expectations. Strong reports from Abbot and UnitedHealth lifted healthcare provider and medical devices subsectors ahead of the broader healthcare sector.
Earnings beats by Netflix (NFLX), Qualcomm (QCOM) and chip equipment maker ASML Holdings (ASML) lifted the tech sector. Shares of eBay (EBAY) also beat estimates, but investors were looking for more and shares dipped on the week.
Economic data was largely positive this week. Housing starts in March missed expectations, but were 9 percent higher than last year. Housing permits were stronger, beating estimates and up 17 percent versus last year. March existing home sales also beat expectations, hitting the highest annualized sales pace since 2007.
The job market grew even stronger this week as continuing claims for unemployment hit their lowest level since 2000. Approximately 2 million people are collecting unemployment, down from the peak above 6 million during the past recession. If continuing claims drop, they will soon reach a four-decade low. Meanwhile, weekly initial claims for unemployment were 244,000.
Oil prices slipped during the week, falling back below $50 a barrel, weighing on the energy sector. The 10-year Treasury yield moved higher and finished the week at 2.2 percent. The U.S. Dollar Index was down slightly on the week.