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Amazon and Alphabet push S&P 500 closer to record high

Amazon and Alphabet push S&P 500 closer to record high

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: The S&P 500 inched toward a record high on Tuesday (Aug 7), lifted by Amazon, Alphabet and Microsoft, and by a strong second-quarter earnings season that fuelled optimism about the strength in the US economy.

The S&P 500 last closed at a record high on Jan 26, and a new peak would reassure investors who have worried in recent months that almost a decade of gains on Wall Street might be ending.

The Dow Jones Industrial Average was up 126.73 points (0.50 per cent) at 25,628.91, while the S&P 500 had gained 8.05 points (0.28 per cent) to 2,858.45.

The Nasdaq Composite added 23.99 points (0.31 per cent) to 7,883.66.

A sharp rally in tech stocks has already helped Nasdaq recover much faster than the broader markets from a selloff in February, hitting a record high late last month.

"We might hit the record and blow through it. As long as there are still strong earnings and there are no corporate blow-ups, there's nothing that says we have to stop. Momentum can go on for a long time," said Liz Young, Senior Investment Strategist at BNY Mellon Investment Management in New York.

The financial sector rose 0.77 per cent as higher yields on the 10-year US Treasury note buoyed bank stocks. JPMorgan rose 0.5 per cent and Bank of America added 0.3 per cent.

The S&P 500 energy index gained one per cent after US sanctions on Iranian goods went into effect, intensifying concerns about supply.

"Energy has been trending higher for a number of months as oil prices have climbed higher, but we’re seeing a pickup in that price as sanctions on Iran become a reality,” said Quincy Krosby, chief market strategist at Prudential Financial in New Jersey.

Google-parent Alphabet rose 1.8 per cent and Microsoft moved up 0.7 per cent, driving a 0.45 per cent gain in the S&P information and technology index. added 1.1 per cent. The Internet retail and infrastructure heavyweight provided the greatest lift to the S&P 500, followed by Alphabet and Microsoft.

A strong earnings season has helped US stocks cushion some of the impact from the ongoing trade issues.

With second-quarter reporting season winding down, 79 per cent of S&P 500 companies have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.

The CBOE Volatility Index, Wall Street's fear gauge, dropped to 10.99 points, its lowest since January.

Tesla jumped 7.4 per cent after Chief Executive Elon Musk in a tweet said that he was considering taking the company private.

Broadridge Financial rose 9.8 per cent and Mosaic climbed five per cent after reporting quarterly results.

Walt Disney added 1.2 per cent ahead of its results after markets close.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favoured advancers.

The S&P 500 posted 30 new 52-week highs and two new lows; the Nasdaq Composite recorded 101 new highs and 62 new lows.

Source: Reuters/de


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