It was another impressive week for the U.S. stock market, as investors continue to cheer corporate earnings. The Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) all recorded all-time highs and a fourth straight weekly win, even after the government shutdown carried over into Monday. Meanwhile, the White House tried to iron out its position on the weakening U.S. dollar, and President Trump told the world "America is open for business" in his speech in Davos. Transport stocks, however, bucked the trend after lackluster airline earnings, sending up a rare divergence signal.
It was one of the busiest weeks of earnings season, and large-cap companies did not disappoint. Netflix (NFLX) stole the show early in the week thanks to its monster earnings report, sending the shares to record highs. Blue chip 3M (MMM) stock followed this up with a strong earnings performance, and Caterpillar (CAT) rewarded options traders with its post-earnings move higher. On Friday, Dow stock Intel (INTC) blasted off to fresh highs of its own after impressive quarterly results.
Healthcare was hot again, with sleep apnea specialist ResMed (RMD) roaring to the top of the SPX after an earnings beat, and these two sector peers touched new highs, as well. In tech, Texas Instruments (TXN) disappointed the Street, unlike these two tech stocks. Earnings helped these commodity stocks stay hot, as well. On the flip side, Starbucks (SBUX) hit an earnings roadblock, and shares of United Continental (UAL) suffered another post-event setback.
There was plenty of stock news outside of earnings, too. Tesla (TSLA) made a splash early in the week when it announced CEO Elon Musk's new compensation package. Kroger (KR) was thrown into the headlines because of a potential Alibaba partnership. And speaking of Chinese e-tailers, JD.com (JD) announced plans to begin business in the U.S.
Cigarette stocks were in focus after an FDA panel ruled against Philip Morris (PM), and shares of Weight Watchers (WTW) again traded around Oprah rumors. Meanwhile, it was Bill Ackman who kept the wind at the back of Nike (NKE) stock, and Wynn Resorts (WYNN) got pulled from record levels due to an unfavorable Wall Street Journal report.
It was another big week for the healthcare sector, which began with news of Celgene's purchase of Juno Therapeutics (JUNO). This helped create tailwinds for the broader sector, lifting familiar names like bluebird bio (BLUE). Elsewhere, positive trial data boosted shares of Cerus (CERS), Array Biopharma (ARRY), and Summit Therapeutics (SMMT). Red-hot SAGE Therapeutics (SAGE) stock could be a buy, too, but Goldman Sachs says to sell Valeant (VRX) stock.
Looking ahead, along with thefirst Fed meeting of 2018, another big week of earnings is due up, with Dow stock Boeing (BA) highlighting the schedule. A number of FAANG stocks will be in the earnings spotlight, too, including Amazon (AMZN) and Apple (AAPL), as the latter deals with lingering iPhone concerns. Yet even as the broader stock market could have much more upside -- and shorts could begin covering -- tech stocks may be due for a breather. Either way, traders should consider the long straddle options strategy amid earnings volatility, and check out the best stocks for straddle buyers in the process.