By Yasin Ebrahim
Investing.com – The Dow climbed Monday, led by technology as the spike in volatility seen toward the end of January eased and investor focus shifted to another important week of quarterly results for the sector.
The Dow Jones Industrial Average rose 1.12%, or 336 points. The S&P 500 was up 1.86%, while the Nasdaq Composite added 2.67%.
Investor sentiment on stocks returned following a rocky end to the week last month as intensity of the retail-led short-squeeze eased, pushing the VIX – the so-called fear index – down more 10%.
GameStop (NYSE:GME) fell more than 20% as retail investors shifted efforts to silver, squeezing short sellers of the metal. Silver prices rose 9% to a more than eight-year high.
The other popular short-squeeze stocks were mostly lower.
AMC Entertainment Holdings (NYSE:AMC) was up 6%, Express Inc (NYSE:EXPR) fell 23%, BlackBerry (NYSE:BB) was up 5%, Nokia Corp ADR (NYSE:NOK) was up 8%, and Bed Bath & Beyond (NASDAQ:BBBY) fell 13%.
Tech led the broader market with the Fab 5 leading to the upside.
Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), both of which report earnings later this week, were up more than 3% and 4% respectively. Microsoft (NASDAQ:MSFT) was up 3%, while Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) were up more than 1%.
Apple reportedly plans to sell bonds, taking advantage of cheap borrowing rates with a view to returning more cash to shareholders.
Qualcomm (NASDAQ:QCOM), eBay (NASDAQ:EBAY) and Paypal are also among the notable companies set to report earnings later this week.
The fourth quarter of earnings is shaping up to be one of the strongest on record, with the roll out of vaccines and easing pandemic impact also helping to improve visibility.
Overall, 37% of the companies in the S&P 500 have reported results for Q4 2020, with about 82% reporting EPS above estimates, which is above the five-year average of 74%, the company said.
"If 82% is the final percentage for the quarter, it will mark the second-highest percentage of S&P 500 companies reporting a positive EPS surprise since FactSet began tracking this metric in 2008," FactSet said.
Energy stocks, meanwhile, turned positive on rising oil prices as Saudi Arabia started to cut production by 1 million barrels a day, following its pledge to do so last month in order to offset production increases by Russia and Kazakhstan.
Focus on stimulus effort were also renewed as a group of ten Republican Senators reportedly proposed a more targeted, but significantly lower $600 billion stimulus package to President Joe Biden. That is well below the president's $1.9 trillion stimulus package proposal.
"Reentering stimulus discussions appears to be giving equities a welcome boost as the stock market tries to reset after its worst week since October," Stifel said in a note.
In other news, Tesla (NASDAQ:TSLA) jumped 5% after Piper Sandler (NYSE:PIPR) upgraded its price target on the stock to $1,200 from $515, citing new levels of growth for decades to come.