NEW YORK, May 17 — Wall Street closed higher yesterday as upbeat earnings and strong economic data put investors in a buying mood, with technology companies leading the charge.
All three major US stock indexes pared gains late in the session, adding less than 1 per cent and bringing the bellwether S&P 500 close to 2 per cent below an all-time high reached on April 30.
While the escalating US-China tariff war continued to be a concern for market participants, upbeat quarterly results and data pointing to a strong US economy helped ease trade-related jitters.
Walmart rose 1.4 per cent after its first-quarter results beat analyst expectations.
Cisco Systems stock saw its biggest percentage jump since February 2016, gaining 6.7 per cent after better-than-expected quarterly results.
On the economic front, groundbreaking on new US homes increased more than expected in April, according to the Commerce Department, as declining interest rates provided support to the struggling housing sector.
The S&P 1500 Homebuilding index advanced 1.2 per cent.
In a separate report from the Labour Department, 16,000 fewer Americans applied for unemployment last week, beating economist estimates.
“If you look at the overall economy, we're in a fundamentally strong position and this is a reinforcement of that,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
Regarding US-China trade negotiations, Keator believes the worst may be over.
“Things had to get worse before they could get better,” Keator added. “With tariffs now in place, the Administration has something to give up.”
Washington placed Huawei Technologies Co on a blacklist which bans it from acquiring components and technology from US firms without prior approval.
Shares of Huawei suppliers Qorvo Inc, Skyworks Solutions Inc, Qualcomm Inc, Xilinx Inc and Micron Technology Inc lost ground.
The Philadelphia SE Semiconductor index ended the session down 1.7 per cent.
Electric automaker Tesla Inc dropped 1.6 per cent following safety agency reports that the Autopilot feature was engaged during a fatal crash in Florida in March.
Ride-hailing rivals Uber Technologies and Lyft Inc posted their third straight day of gains after spending much of their post-debut trading days in negative territory. Their shares were up 4.1 per cent and 2.9 per cent, respectively.
The Dow Jones Industrial Average rose 214.66 points, or 0.84 per cent, to 25,862.68, the S&P 500 gained 25.36 points, or 0.89 per cent, to 2,876.32 and the Nasdaq Composite added 75.90 points, or 0.97 per cent, to 7,898.05.
All 11 major sectors in the S&P 500 were trading in positive territory, with materials, financials and consumer discretionary seeing the largest percentage gains.
A mostly upbeat first-quarter earnings season is beginning to wind down, with 457 S&P 500 companies having reported. Of those, about 75 per cent have beaten profit expectations, according to Refinitiv data.
Analysts now expect first-quarter earnings growth of 1.4 per cent, a significant improvement over the 2 per cent loss expected on April 1.
Nvidia Corp was up over 4 per cent in after-market trading after the Huawei Technologies supplier posted quarterly earnings.
Pinterest Inc dropped more than 12 per cent in extended trading after posting results.
Advancing issues outnumbered declining ones on the NYSE by a 2.19-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favoured advancers.
The S&P 500 posted 51 new 52-week highs and two new lows; the Nasdaq Composite recorded 92 new highs and 69 new lows.
Volume on US exchanges was 6.56 billion shares, compared to the 6.98 billion average over the last 20 trading days. — Reuters