Dow 35K

By Brian Hershberg | Friday, July 23

Friday I'm in Love. Turns out, it was just another manic Monday for stocks as the rout that started the week turned into a four-day rally that saw the Dow Jones Industrial Average close above 35,000 for the first time and the big three indexes close at all-time highs.

On the week, the DJIA rose 1.1% to finish at 35,061.55, its 28th record close of the year; the S&P 500 was up 2% at 4411.79, its 40th record close of the year; and the Nasdaq Composite added 2.8% to 14,836.99 for its 25th record close of 2021. 

That this record-setting performance came after stocks on Monday plunged amid rising fears stemming from the Delta variant of Covid-19 is a testament to the market's resilience during the pandemic (and at least some expectation that governments won't resort to the same commerce-curbing measures to contain its spread). 

“Dow milestones are largely just symbolic, but they do generate headlines and can boost retail investor sentiment,” writes Sean Bandazian, investment analyst for Cornerstone Wealth. “Thirty-five thousand represents another one of those symbolic milestones for the market, especially when you consider the index fell below 20,000 just over a year ago.”

Records and investor ebullience aside, the rally is being driven by a variety of fundamental factors, from solid U.S. and overseas economic data, to easy monetary policy and hefty doses of fiscal stimulus, to strong corporate earnings. The return of the growth trade lends further proof that the rally has real legs, as investors cycle back into the big tech names that tend to rise when the outlook is bright.

Today, a combination of strong earnings and analyst upgrades lifted many tech names. Surging advertising revenue logged by social-media platforms Snap and Twitter, in particular, helped drive the broader sector. 

Writes Barron's reporter Max Cherney:

Twitter’s and Snap’s strong revenue growth appears to be a positive signal for other internet platforms that rely on digital ad revenue, such as Facebook and Alphabet—but it also has buoyed niche advertising businesses such as Pinterest, digital ad-tech company Trade Desk, and video-streaming platform Roku.

Today wasn't just a big day for established stocks, as seven companies made their market debut to cap off a week in which 19 initial public offerings were launched. The batch today included Core & Main, a specialized distributor of water, wastewater, storm-drainage, and fire-protection products, up 19%; Caribou Biosciences, a genome-editing tech company, up 2%; and Gambling.com, a provider of marketing services for the gambling industry, which ended flat. 

A point of note on the surfeit of IPOs from Barron's reporter Luisa Beltran:

The surge of deals comes as growth companies continue to receive high valuations from public equity markets. More than 600 IPOs, including 379 blank-check companies, had priced as of July 23, raising $210.3 billion, according to Dealogic. This compares to 132 IPOs, including 50 blank checks, totaling nearly $59 billion for the same time in 2020.

Looking ahead, the trading app Robinhood is due to go public this coming week and one might think it suggests the market is near a top. It's happened before. But with more earnings on the way and the Federal Reserve likely to maintain its easy-money policy when it meets on Tuesday and Wednesday, markets could be poised to extend those record runs.

Until then, here are some Friday fun facts about the Dow's latest milestone, courtesy of our Market Data Group:   

• Including today, it has been 69 trading days since the last 1,000-point milestone, the longest time between milestones since 29,000 to 30,000.
• Including today, it has been 165 trading days since the last 5,000-point milestone, the fastest such run.
• This is the fifth 1,000-point milestone of the year, the most in a single year since 2017 when it also notched five 1,000-point milestones.
• Boeing has subtracted the most points since 34,000.
• Goldman Sachs Group has added the most points since 34,000.

Watch our TV show on Fox Business Fridays at 10 p.m. or 11:30 p.m. ET; Saturdays at 10 a.m. or 11:30 a.m. ET, or Sundays at 7 a.m., 10 a.m. or 11:30 a.m. ET. This week, see an interview with Williams-Sonoma CEO Laura Alber on the retailer's strong performance during the pandemic and how to keep the momentum going. Plus: a discussion of travel stocks to buy now.

DJIA: +0.68% to 35,061.55
S&P 500: +1.01% to 4,411.79
Nasdaq: +1.04% to 14,836.99

The Hot Stock: Moderna +7.8%
The Biggest Loser: Intel -5.3%

Best Sector: Communication Services +2.7%
Worst Sector: Energy -0.4%