US Stocks – S&P 500, Dow scale all-time Trading
July 29 (Reuters) – The S&P 500 and the Dow indexes scaled record highs on Thursday as a slate of strong corporate earnings reports and data showing a pickup in U.S. economic growth reinforced confidence in a post-pandemic recovery.
Ford Motor Co jumped 4.0% to hit a more than three-week high as it lifted its profit forecast for the year, while KFC-owner Yum Brands Inc rose 5.2% after beating expectations for quarterly sales.
Overall, of the 195 companies in the S&P 500 that have reported second-quarter earnings so far, nearly 91% have beaten estimates, according to Refinitiv, although investors have begun to book profits across equities after solid stock market gains this year.
“Even if earnings are strong, you can’t look at the environment of the past year and say this is the fundamental trend of these businesses,” said Mike O’Rourke, chief market strategist at JonesTrading.
"So for most investors, they have to decide: do you want to chase at these higher multiples or do you want to take a step back and let the business settle in?"
Still, economically sensitive S&P indexes including financials, miners and energy jumped more than 1%, a day after the Federal Reserve said it was not yet time to start withdrawing its massive pandemic-era monetary stimulus.
The real-estate sector – generally considered a defensive play – hit a record high as the Fed also said there was “very little support” for cutting the $40 billion in monthly purchases of mortgage-backed securities “earlier” than the $80 billion in Treasuries.
By 12:02 p.m. ET, the Dow Jones Industrial Average was up 0.53%, the S&P 500 was up 0.53% and the Nasdaq Composite was up 0.32%.
Tesla Inc jumped 4.8%, tracking its best day in more than a month, and was the biggest boost to the S&P 500:
- Ford rises after strong earnings
- Tesla tracks best day in over a month
- Banks, energy, mining stocks gain after dovish Fed
- Indexes up: Dow 0.53%, S&P 0.53%, Nasdaq 0.32%
Trading on Wall Street in the past few months has also been dictated by fears that a rise in cases of the Delta variant would hurt the U.S. economic rebound.
Data on Thursday showed gross domestic product increased at a 6.5% annualized rate in the second quarter. That was, however, slower than the 8.5% growth rate economists polled by Reuters had forecast.
“Fresh COVID-19 fears aren’t all to blame, though — higher demand and limited supply factor in, along with labor shortages and the somewhat cooling housing market,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.