S&P 500 climbs to five-month high as financials, industrials rise

S&P 500 climbs to five-month high as financials, industrials rise

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)
NEW YORK: The S&P 500 hit a five-month high on Wednesday (Jul 18) as strong earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.As earnings season ramps up, analyst optimism has grown; S&P 500 earnings are now seen to have increased 21.4 per cent in the quarter ended Jun 30, up from 20.7 per cent on Jul 1. Of the 48 companies in the index that have reported so far, 87.5 per cent posted earnings above analyst expectations.
"Earnings are keeping the market up," said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York. "Nobody's going to sell their stocks ahead of seeing what happens here with earnings."Investors also looked to US Federal Reserve Chairman Jerome Powell's testimony before a House of Representatives committee, as he faced new questions on trade policy risks the day after expressing confidence in the strength of the US economy.The US housing market continues to be an economic soft spot. A report showed housing starts fell 12.3 per cent in June to a nine-month low as homebuilders struggle with higher lumber prices and ongoing land and labour shortages.The Dow Jones Industrial Average rose 79.40 points (0.32 per cent) to 25,199.29, the S&P 500 gained 6.08 points (0.22 per cent) to 2,815.63 and the Nasdaq Composite added 0.67 points (0.01 per cent) to 7,854.44.
Online retailer Amazon.com became the second company after Apple to reach US$900 billion in market value, a major milestone in its 21-year history as a publicly listed company.Berkshire Hathaway led the financial sector higher, rising 4.5 per cent on news that the company eliminated a restriction on its ability to buy back its own stock.Morgan Stanley shares rose 2.5 per cent after the investment bank reported better-than-expected quarterly profit.S&P 500 industrials were up 1.1 per cent following strong earnings from railroad CSX Corp and United Continental.
The Dow Jones Transport Average jumped 2.2 per cent, on pace for its biggest daily advance in three months.Shares of Google parent Alphabet edged higher after earlier losses after EU antitrust regulators hit the tech company with a record US$5 billion fine.Advancing issues outnumbered declining ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.The S&P 500 posted 27 new 52-week highs and no new lows; the Nasdaq Composite recorded 86 new highs and 42 new lows.
Source: Reuters/de
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