NEW YORK, July 23 ― The S&P 500 climbed toward a record high yesterday, supported by expectations of lower interest rates, while investors awaited quarterly earnings from marquee companies Facebook, Alphabet and Amazon later this week.
Facebook Inc rallied 2.0 per cent ahead of its report due out after the bell tomorrow, while Amazon.com Inc and Google-parent Alphabet Inc were each up more than 0.7 per cent ahead of their reports on Thursday.
Investors' reactions to the reports of these top-tier growth companies could affect broader market sentiment, with the S&P 500 about 1 per cent below its July 15 record high close.
“How is that going to affect my other tech holdings and the market overall? That is more worrying than my actual investment in Alphabet,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
The technology index jumped 1.2 per cent, the most among the S&P sectors, while the Philadelphia chip index surged almost 2 per cent. Apple added 2.3 per cent to US$207.22 (RM852.30) after Morgan Stanley raised its price target to US$247 from US$231.
Shares of Boeing Co fell 1.0 per cent and pressured the blue-chip Dow index after ratings agency Fitch revised its outlook on the planemaker to “negative” from “stable,” while the tech-heavy Nasdaq was lifted by chipmakers.
The European Central Bank meets on Thursday and money markets are pricing in a more than 50 per cent chance of a 10-basis-point cut in interest rates. Federal Reserve officials are set to meet just days later, and are widely expected to lower rates by at least 25 basis points.
Hopes of an interest rate cut have helped Wall Street's main indexes hit record levels this month, recovering from a slump in May caused by a sudden escalation of US-China trade tensions.
About 30 per cent of S&P 500 companies are set to report second-quarter results this week, with overall profits now estimated to rise about 1 per cent, according to Refinitiv IBES data.
Chip stocks gained on news that White House economic adviser Larry Kudlow will host a meeting with executives of semiconductor and software companies on Monday to discuss a US ban on sales to China's Huawei Technologies.
The Dow Jones Industrial Average rose 0.07 per cent to end at 27,172.04 points, while the S&P 500 gained 0.28 per cent to 2,985.02. The Nasdaq Composite added 0.71 per cent to 8,204.14.
Second-quarter earnings have been mixed so far, with major banks raising concerns about profit growth in a low-interest-rate environment. Microsoft Corp and International Business Machines, on the other hand, have reported better-than-expected earnings.
Halliburton Co surged 9.1 per cent, the most among S&P 500 companies, after the oilfield services provider's second-quarter profit beat analysts' estimates.
Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favoured decliners.
The S&P 500 posted eight new 52-week highs and five new lows; the Nasdaq Composite recorded 47 new highs and 118 new lows.
Volume on US exchanges was 5.1 billion shares, compared to the 6.4 billion average for the full session over the last 20 trading days. ― Reuters
