After a choppy week of trading, stocks closed out with a broad rally. The S&P 500 rose 1.1% Friday, covering all of its losses from a day earlier. The gains were shared pretty much by every sector in the index. Technology companies owned a big slice of the rally while banks and communication companies took a large part of the remaining share. Treasury yields too, inched higher.
The S&P 500 gained 45.19 points to 4,180.17. The Dow Jones Industrial Average rose 227.59 points, or 0.7%, to 34,043.49. The Nasdaq climbed 198.40 points, or 1.4%, to 14,016.81.
Smaller company stocks outgained the broader market. The Russell 2000 index rose 39.24 points, or 1.8%, to 2,271.86.
Top Stories This Week
Bad News For Tobacco Stocks
Biden is certainly turning out to be a tough taskmaster as his policies intend to revolutionize the way business is done in the United States of America. Biden’s plan to bring in new regulations in the tobacco industry has become a major source of concern for tobacco companies in the U.S. He plans to ban menthol cigarettes and lower the level of nicotine to negligible and with this move, experts say he would hasten the secular decline in smoking that the cigarette companies are already experiencing.
All manufacturers will be affected, if the regulations were to come into effect but Altria (NYSE:MO) and British American Tobacco (NYSE:BTI) would bear a huge brunt of the effects. Their operational and financial position may get affected considerably.
Experts do feel though that the effects may be short-term as the companies are working on introducing alternatives to cigarettes in the market. Investors should also consider that the profits the cigarette companies make today are being invested in a future where the harm from their products is considerably lowered. Any drop in their stock prices should be seen as an opportunity to buy them at a discounted price and reap the rewards as cigarette alternatives come to the forefront in the future.
Trouble In Paradise For Netflix?
Netflix (NASDAQ:NFLX) has witnessed disappointing subscriber growth figures after posting its earnings recently. The management’s guidance had expected an addition of 6 million subscribers, whereas Netflix saw a net growth of only 4 million subscribers.
Netflix shares are still trading roughly 15% below January’s all-time highs. Many experts are of the opinion that this is the end of Netflix growth. The chart below is a good indication of this –
In addition to missing its own subscriber growth targets in the first quarter, the company has witnessed disappointing growth in the first few weeks of the next reporting period as well. In the past as well, that is in the year 2011, Netflix had seen similarly disappointing growth and bounced back, so investors have hopes that the company will turn around its fortunes soon enough. Whether it truly happens or not, especially in the face of stiff competition from new entrants like Disney+, remains to be seen.
Biden Looking To Make America Greener & Cleaner
President Joe Biden’s plan to cut carbon emissions to half by 2030, have sent solar stocks soaring.
The goal is double of what the U.S. agreed to when Biden re-joined the Paris Climate Accord, and is based off of the U.S.’ 2005 carbon emissions. Biden’s proposal has come at a time when climatic changes and their impact has started to gain more attention among world leaders.
Investors believe that solar power will likely be a key technology that helps the administration meet its ambitious goals. In the past too, Biden’s $2.2 trillion infrastructure plan helped spur a rally in electric vehicle stocks. The Biden administration gave a statement which said that its new carbon reduction goals would “create millions of good-paying, middle class, union jobs.”
Other Top Stories:
Tax The Rich: Biden’s new plan to increase capital tax shakes the markets.