Record highs for the Dow and S&P 500 seem to have awoken lackluster European markets too, with the FTSE 100 up 40 points in afternoon trading.

  • Banks and resource stocks propel Dow to a new high.

  • FTSE 100 is supported by similar names.

  • Tech stocks are on the watch for upcoming earnings.

The final session of the week has ended with the Dow and S&P 500 hitting new record highs, shrugging off some weakness in tech stocks as banks and energy names lead the way higher. The move has been almost entirely one-way this week on Wall Street, which has once more outpaced its European rivals. Earnings season continues to provide the fuel for this move, as stocks take advantage of lowered expectations, but even leaving the game of expectation management aside, the overall fundamentals remain strong. The FTSE 100 has shaken off much of the negativity of earlier in the week and is putting its best foot forward in a bid to surpass recent highs. As with US indices, raw materials and banks are behind the strength in the index, as the success of the US earnings season bolsters confidence in other indices and sectors in the hopes that the global economic rebound is still on track.

Tech really steps into the limelight next week, as the big names report earnings. Facebook kicks off the week, rapidly followed up by other members of this august club. Tech investors will look for signs that these heavy hitters are continuing to produce prodigious amounts of cash, maintaining their dominant position despite regulatory concerns. This is the opportunity for the Nasdaq to catch up with the S&P 500, and a strong set of numbers here would turn reporting season from ‘good’ to ‘great’, fuelling additional equity gains.

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