Monday saw a quiet start to the new week on Wall Street. The Dow Jones Industrial Average (DJINDICES:^DJI) was up just 2 points to 25,066 as of 11:35 a.m. EST. The S&P 500 (SNPINDEX:^GSPC) climbed about 6 points to 2,712, while the Nasdaq Composite (NASDAQINDEX:^IXIC) saw the biggest gains, jumping 60 points to 7,324.
Stocks have done quite well so far this year, and much of the upward push has come from positive earnings results from the many companies that have already reported this season. This afternoon, investors will hear from two more key players -- Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Gilead Sciences (NASDAQ:GILD) -- and what they have to say could have a dramatic impact on their entire industries and the stock market as a whole.
Searching for strength
Alphabet will report its fourth-quarter results this afternoon, and it will be the last of the popular FAANG stocks to report. With mixed showings from the other members of this illustrious group, many will look to Alphabet as a potential tiebreaker to show whether the entire tech industry is in danger of a cyclical downturn, or if any problems are more isolated to specific companies and niches. Shares of the tech giant were up between 1% and 2% as of 11:35 a.m. EST.
Bullish investors still expect to see healthy gains in advertising revenue from Alphabet's key Google unit, and even though traffic acquisition costs are likely to climb, they should lag the pace of sales gains, hopefully resulting in better margin figures. Meanwhile, those who are less comfortable with the company's prospects are likely to focus on continuing regulatory challenges, such as the 50 million euro fine that the French government imposed on the company under allegations that it failed to comply with the new GDPR data collection guidelines.
Alphabet's shares didn't see the gains that some of its peers experienced in 2018, so for many, the fourth-quarter financial report will be the company's opportunity to start playing catch-up. If things don't go well, though, it could cause tech investors to start thinking that the decade-old bull market might well finally be at an end.
Looking to get healthier
Meanwhile, in the biotech industry, Gilead Sciences shares were down slightly on Monday morning. The company will also be reporting its latest results after the close of trading Monday. But a lot more is expected from the biotech giant in 2019, because Gilead is going through some big changes.
First and foremost, incoming CEO Daniel O'Day is set to assume the chief executive role as of the beginning of March. O'Day has a reputation for innovation that should fit well at Gilead, which has worked hard to keep its pipeline of treatments strong in order to foster growth. In terms of focus areas, many see the company working to sustain its strength in key areas like HIV treatments while working to restore some of its past dominance in areas like hepatitis C.
Clinical trial results will also be instrumental for Gilead. Between combination-HIV drug Biktarvy, liver-disease treatment selonsertib, and the candidate treatment filgotinib for rheumatoid arthritis, Gilead expects to get a lot of valuable data this year that could lead to key approvals in the near future. With so much on the line, any unexpected setbacks could be especially costly.
Gilead's earnings report won't necessarily have a lot of information on these long-term drivers of growth in sales and profit. However, in providing a read on the general state of the biotech industry overall, healthcare investors will take Gilead's report and apply the conditions it's facing to a host of conventional pharma companies, as well as biopharmaceuticals.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dan Caplinger owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Gilead Sciences. The Motley Fool has a disclosure policy.