NEW YORK, Oct 24 — A surge in the shares of industrial giants Caterpillar and 3M catapulted the blue-chip Dow Jones index to a fresh record today.
3M jumped 4.7 per cent on better-than-expected earnings, while Caterpillar rose 4.9 per cent after handily beating profit and sales estimates and raising its full-year forecast.
Other Dow components, United Technologies and McDonald’s, also notched up gains in morning trading following strong quarterly reports.
“The reaction to earnings from the Dow components is in favour,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“Chances are, with this strong an opening, it will likely remain positive.”
Third-quarter earnings season has been largely positive, with three quarters of the 97 S&P 500 companies that have reported results as of yesterday beating profit estimates.
That and rising hopes of President Donald Trump’s tax plans moving forward have helped the Dow and S&P close at record highs on all five trading days last week.
Investors are also keeping a watch on any news around the nomination of the new Federal Reserve chief. Trump told reporters yesterday he is “very, very close” to deciding who should chair the Fed after interviewing five candidates for the position.
At 9:37am ET, the Dow Jones Industrial Average was up 178.79 points, or 0.77 per cent, at 23,452.75, the S&P 500 was up 5.06 points, or 0.20 per cent, at 2,570.04 and the Nasdaq Composite was up 7.21 points, or 0.11 per cent, at 6,594.04.
Six of the 11 major S&P indexes were higher, led by the industrial sector.
Financial stocks also rose, led by gains in Bank of America and JPMorgan.
General Motors jumped 3 per cent after the No. 1 US automaker reaffirmed its full-year earnings forecast and promised to slash stocks of unsold vehicles.
Whirlpool tumbled 10 per cent after the home appliances maker reported profit and sales below estimates and lowered full-year earnings guidance.
Biogen slipped 6 per cent after the company reported disappointing US sales of Spinraza, a potential blockbuster drug.
Centene dipped 6.3 per cent after the health insurer said it expected an impact of 7-12 cents per share in the fourth quarter if the subsidies are not received.
That along with a 1.5 per cent drop in Johnson & Johnson and 2.9 per cent decline in AbbVie kept the healthcare index in the red. Advancing issues outnumbered decliners on the NYSE by 1,751 to 731. On the Nasdaq, 1,536 issues rose and 759 fell. — Reuters