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S&P, Nasdaq end at records on strong earnings

S&P, Nasdaq end at records on strong earnings

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 25, 2019. REUTERS/Brendan McDermid

NEW YORK: Major US indices surged to records on Friday (Jul 26) following standout earnings from Google, Starbucks and others and as investors anticipated an expected Federal Reserve interest rate cut next week.

The broad-based S&P 500 rose 22.18 points (0.74 per cent) to 3,025.86, while the tech-rich Nasdaq Composite Index jumped 91.67 points (1.11 per cent) to 8,330.21. Both are new records, topping the prior all-time highs set Wednesday.

The Dow Jones Industrial Average climbed 51.47 points (0.19 per cent) to 27,192.45, about 170 points shy of its own peak.

The records reflect positive investor sentiment midway through an earnings season that is seen as generally topping forecasts.

Confidence remains strong that the Fed will cut interest rates next week even after a recent spate of largely solid economic data, including Friday's better-than-expected US growth report for the second quarter.

The new records came as President Donald Trump both warned of retaliatory tariffs on French wine due to a French tax on American tech giants and also threatened to withdraw recognition of China's "developing nation" status at the World Trade Organization.

But those moves were not consequential enough to outweigh hopes that next week's face-to-face trade meetings between the United States and China will lead to progress, said Art Hogan, chief market strategist at National Securities.

Hogan said the exchange of goods between the United States and France was comparatively small, while the threat against developing nations at the WTO appeared to be a ploy for another bargaining chip in trade talks with China.

"I don't think that this is necessarily another escalation," Hogan said.

Among individual companies, Google parent Alphabet surged 10.5 per cent after reporting that earnings tripled in the second quarter from a year earlier to US$9.9 billion and announcing US$25 billion in stocks buybacks.

Starbucks was another big winner, surging 8.9 per cent as it lifted full-year profit and sales targets and reported a six percent jump in comparable store sales.

Telecom giants T-Mobile and Sprint won 5.4 per cent and 7.4 per cent as US antitrust enforcers approved their US$26 billion merger.

The deal calls for Sprint to sell some of its prepaid wireless operations to satellite TV operator Dish Network, which would create its own telecom service. Dish climbed 0.9 per cent.

Source: AFP/ec


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