Stocks move higher; S&P 500 still on track for weekly loss

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Stocks were rising in afternoon trading Friday, but the overall market is still on pace to end the week lower for the first time in five weeks.

Investors continue to be focused on individual company earnings, getting results late Thursday from chip giant Intel and, on Friday, companies like American Express and Honeywell. Corporate earnings have been mostly positive, but the market has been choppy as investors weigh economic growth against threats from the pandemic and worries about changes in tax policy.

The S&P 500 index was up 1% as of 11:38 a.m. Eastern. The Dow Jones Industrial Average rose 175 points, or 0.5%, to 33,991 and the Nasdaq rose 1.3%.

The gains were shared broadly by every sector in the S&P 500, with banks making solid gains as bond yields ticked higher, which allows them to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 1.57% from 1.55% late Thursday.

Several earnings reports out overnight disappointed investors. Intel fell 6.4% after the company said it expected the ongoing chip supply shortage to remain for some time. The shortage of semiconductors has impacted other industries too. Car manufacturers like Ford and General Motors have had to halt production due to the lack of chips.

American Express fell 2.1% after the company reported a 10% drop in revenue from last year as many of its customers stopped using their cards for travel, entertainment and dining. The company has called 2021 a “transition year” and did not give an outlook for the upcoming year due to the uncertainty on when travel and dining would return in the U.S. and globally.

Investors are also taking into account the news out of Washington that President Joe Biden plans on introducing higher capital gains taxes to help pay for all the increased government spending that is happening to help the economy recover from the pandemic. Bloomberg News reported the pending proposal, citing unidentified sources.

Higher taxes on capital gains would make stocks marginally more expensive in the long term, which might impact the market’s overall valuation. Despite millions of Americans having their retirement funds in the stock and bond markets, most stocks are owned by the rich.

The price of Bitcoin dropped more than 10% to below $50,000. It had traded for as much as $63,000 as early as last week.