The trend of better-than-expected earnings will be put to the test this week when investors hope Apple can exceed already high expectations and Facebook reports its first quarterly earnings.
Apple accounts for a significant proportion of the overall earnings of Standard & Poor's 500 components. S&P 500 earnings are expected to show a rise of 5.7 percent in the second quarter from a year ago. Excluding the maker of the iPad, the rise is 4.8 percent, according to Thomson Reuters data.
Apple's results, due tomorrow, could help stocks build on last week's gains and counter investor worries over the euro zone crisis.
More signs of financial stress in Spain on Friday caused stocks to give back some of the week's increase. The S&P 500 ended 0.4 percent higher last week.
“Apple can drive the whole (tech) group,” Daniel Morgan, who helps manage about $3.5 billion at Synovus Trust Company in Atlanta, told Reuters.
Morgan said Apple's growth has largely depended on the success of its new products. “For the stock, to continue its trajectory at the pace it has, it's critical that they release these new products,” he said. Apple's shares are up 49.2 percent for the year so far.
Investors are likely to be just as keen to hear from Facebook when it reports on Thursday. Facebook's first results following its market debut could give investors another chance to indicate how they feel about the stock since its disappointing initial public offering.
From : Arabnews