S&P 500 hits over 5-month high on solid earnings

The S&P 500 hit a five-month high on Wednesday as solid earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.


Reuters | Updated: 19-07-2018 00:16 IST | Created: 19-07-2018 00:16 IST
S&P 500 hits over 5-month high on solid earnings
As earnings season ramps up, analyst optimism has grown. (Image Credit: Pixabay)
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The S&P 500 hit a five-month high on Wednesday as solid 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 percent in the quarter ended June 30, up from 20.7 percent on July 1. Of the 48 companies in the index that have reported so far, 87.5 percent 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 U.S. 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 U.S. economy.

The U.S. housing market continues to be an economic soft spot. A report showed housing starts fell 12.3 percent in June to a nine-month low as homebuilders struggle with higher lumber prices and ongoing land and labor shortages.

The Dow Jones Industrial Average rose 73.91 points, or 0.29 percent, to 25,193.8, the S&P 500 gained 5.19 points, or 0.18 percent, to 2,814.74 and the Nasdaq Composite added 1.07 points, or 0.01 percent, to 7,856.18.

Online retailer Amazon.com became the second company after Apple to reach $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 percent on news that the company eliminated a restriction on its ability to buy back its own stock.

Morgan Stanley shares rose 2.5 percent after the investment bank reported better-than-expected quarterly profit.

S&P 500 industrials were up 1.1 percent following strong earnings from railroad CSX Corp and United Continental.

The Dow Jones Transport Average jumped 2.2 percent, 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 $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. 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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