Cloud Services Help Amazon and Microsoft Lead SPY Upward
Tech-Heavy NASDAQ Keeps Outperforming the US Stock Market (Part 1 of 3)
Amazon (AMZN) and Microsoft (MSFT) lead SPY up on April 24
Cloud services in the technology and technology-enabled sector are booming currently—and they’re here to stay. The technology is pumping the top and bottom lines of leading technology-enabled firms such as Amazon (AMZN), Microsoft (MSFT), and Google (GOOG) in the United States. Read Why is cloud computing such a fast-growing business? to learn more.
The technology sector–tracking Technology Select Sector SPDR ETF (XLK) was up 0.87%. The tech-heavy NASDAQ-tracking PowerShares QQQ Trust ETF (QQQ) was up 1.36%, while SPY gained 0.23%. With Thursday’s earnings reports, the technology sector is certainly rallying faster than most other key sectors of the US economy.
The technology sector is leading the way this earnings season
Since earnings season kicked off on April 8, with Alcoa’s (AA) earnings, the US stock market (SPY) has been rallying on positive earnings reports from companies in various economic sectors. However, the price performance of the technology sector, as represented by QQQ and XLK in the chart above, has outpaced broad market performance (SPY) as well as other sectors, such as consumer discretionary or healthcare. Performance in the healthcare sector has closely matched the technology sector. The healthcare sector also thrives on technology and innovation.
On a macro level, the current upswing in the technology sector could also be due to the US economy’s current business cycle. To learn more about business cycle investing, read Business Cycle Investing: What Should You Look For?
The recent earnings releases of top US multinational companies in the technology sector further substantiate this point. Let’s take a look at which technology companies shone on Wall Street on April 24.
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