NEW YORK, July 19 — Wall Street’s main indexes inched higher today after solid results from technology giant Microsoft added to an upbeat mood following hints from a top Federal Reserve official that a US interest rate cut could be imminent.
Microsoft Corp, the most valuable US company, rose 1.7 per cent as strength in its cloud business helped it beat estimates at the end of a week of mixed earnings.
The gains also lifted the technology sector 0.38 per cent, making it one of the six major S&P indexes trading higher.
“Microsoft is a sign that not all companies are suffering from the downturn we’re seeing in manufacturing or the pressure from interest rates that’s affecting financials,” said Jeff Kleintop, chief global investment strategist, at Charles Schwab in Boston.
Second-quarter profits at S&P 500 companies are now estimated to rise 1 per cent, according to Refinitiv IBES data, in a reversal from earlier expectations of a small drop.
Remarks from the New York Fed President John Williams, a permanent voting member of the Fed’s policy setting committee, that the US central bank cannot wait for economic disaster to unfold and must add stimulus early were behind Thursday’s positive close.
Traders have raised bets for a larger, half-percentage point cut in rates at the July 30-31 policy meeting to 43 per cent, from a 23 per cent chance a week ago, according to CME Group’s FedWatch program.
Gains in Boeing Co also propped up the blue-chip Dow Industrials and the benchmark S&P 500.
The planemaker disclosed it would take a US$4.9 billion after-tax hit due to estimated disruptions from the grounding of its 737 MAX, but shares gained 3.6 per cent indicating that investors had expected worst.
At 10.48am ET, the Dow Jones Industrial Average was up 61.51 points, or 0.23 per cent, at 27,284.48, and the S&P 500 was up 2.82 points, or 0.09 per cent, at 2,997.93. The Nasdaq Composite was up 11.13 points, or 0.14 per cent, at 8,218.37.
The main indexes have eased off all-time highs hit at the start of this week as some of the first batches of second-quarter earnings releases pointed to a slowdown in growth under the shadow of US-China trade tensions.
Kansas City Southern shares rose 2.6 per cent after the railroad operator posted a better-than-expected quarterly profit. Its shares helped the Dow transports index edge up about 0.8 per cent.
Credit card issuer American Express Co beat profit estimates but shares slipped 2.3 per cent as expenses jumped.
Advancing issues outnumbered decliners by a 1.27-to-1 ratio on the NYSE and by a 1.14-to-1 ratio on the Nasdaq.
The S&P index recorded 44 new 52-week highs and three new lows, while the Nasdaq recorded 52 new highs and 42 new lows. — Reuters