monday big week for coperate earnings

 

The Nasdaq Composite climbed to a closing record Monday amid sharp volatility in technology stocks and a big week for corporate earnings.

The Nasdaq finished higher by 0.7%. The tech-heavy index jumped as much as 1.4% after the opening bell, then turned negative and tumbled to a 1.3% loss before rebounding. It ended last week at record levels.

The Dow Jones Industrial Average dropped 0.1%, while the S&P 500 added 0.4% to close at a record.

A raft of corporate earnings reports in the coming days is expected to show which corporations are thriving and which are struggling amid the Covid-19 pandemic.

More than one-fifth of the broad S&P 500 index and one-third of Dow components are scheduled to release earnings this week. Starbucks, Verizon and Microsoft are slated (cover/ for Tuesday. Other major tech firms are reporting later in the week, including Apple, Tesla and Facebook on Wednesday.

"The way that management will communicate their outlook will be key for markets," said Sophie Chardon, a cross-asset strategist at Lombard Odier. "Investors will have to weigh the possibility of vaccinations with the reality of new lockdowns" and the impact on each company.

Concerns about Covid-19 vaccine supplies have also sent jitters through the markets. Pharmaceutical giant Merck scrapped its plans to develop a Covid-19 vaccine after trials yielded disappointing results, pulling a major player out of the coronavirus vaccine race. Its shares were roughly flat.

Merck's announcement came after AstraZeneca warned on Friday that its vaccine deliveries to the European Union would lag projections.

"The vaccine rollout is not as speedy or smooth as we had hoped in November," said Liz Ann Sonders, chief investment strategist at Charles Schwab.

Stumbles in the vaccination drive and the spread of new coronavirus variants have helped fuel recent gains in tech stocks. The biggest tech companies are seen as benefactors from stay-at-home orders, as firms and households increase their use of digital technology when operating remotely.

"You're getting rotation out of the more cyclical stocks. These big tech stocks are perceived as a bit of a haven trade," said Michael Hewson, chief market analyst at CMC Markets.

Tech shares have also been a favorite of individual investors who have poured into the stock market over the past year, fueling a broad rally and driving wild moves in some stocks.

One of them, GameStop, was up 18% on Monday, paring gains after it more than doubled in value earlier in the day. The videogame retailer has been at the center of a fight between bullish day traders communicating on the internet forum Reddit, and short sellers, who bet heavily against the stock.

Other stocks that have captured the attention of small investors also made big moves on Monday. Retailer Bed Bath & Beyond climbed nearly 5% while movie-theater chain AMC Entertainment jumped more than 25%.

"The newly minted traders are using message boards and causing just really nutty stuff to happen," Ms. Sonders said.

Investors also are monitoring negotiations over President Joe Biden's plan for additional fiscal stimulus to combat fallout from the pandemic. His proposal for a $1.9 trillion spending package is likely to be a major topic of discussion among U.S. lawmakers this week.

Technology and social-media stocks were volatile. Apple was up 2.3%. Data-analytics firm Palantir Technologies advanced 11% ahead of a high-profile demo of its software planned for Tuesday, paring gains after surging as much as 21% earlier.

Meanwhile, Twitter fell 0.4%% and online marketplace Etsy sank 2.1% with both stocks retreating from morning gains.

Energy stocks and financials were among Monday's underperformers. Chevron shares fell 0.9%, while Goldman Sachs dropped 2.2%, weighing on the Dow.

In corporate news, shares of Kimberly Clark rose 3.2% after the maker of Kleenex and Huggies said it expects net sales to rise in 2021, raised its quarterly dividend and unveiled a $5 billion share-buyback program.

Real-estate firm Tishman Speyer's special-purpose acquisition company TS Innovation Acquisitions soared nearly 45% after it said it would merge with Latch, a smart-lock maker, to take the company public.

Overseas, the pan-continental Stoxx Europe 600 fell 0.8%, which analysts attributed to reports that the U.K. and France were heading toward tighter lockdown measures.

In Asia, most major stock benchmarks rose. The Shanghai Composite Index added 0.5% and Hong Kong's Hang Seng Index climbed 2.4%, buoyed by the rally in tech shares.

South Korea's Kospi Index advanced 2.2%. The index's heavyweight Samsung Electronics rose 3% and chip maker SK Hynix rallied over 5%. Both are slated to report earnings this week.

China's most valuable internet company, Tencent Holdings, jumped nearly 11% to a record in Hong Kong trading. Tencent portfolio company Kuaishou Technology, a TikTok-like video-recording app, announced a coming initial public offering that may value it at about $60 billion.

In bond markets, the yield on the benchmark 10-year U.S. Treasury bond edged down to 1.038%, from 1.090% Friday.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Alexander Osipovich at alexander.osipovich@dowjones.com

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