NEW YORK, July 23 — Wall Street’s main indexes rose today, helped by megacap technology stocks and strong earnings from social media companies, while a weak sales forecast from Intel hit chipmakers amid increasing supply-chain constraints.
Twitter Inc gained 1.3 per cent after it reported higher quarterly revenue growth, while Snapchat-owner Snap Inc surged 22.9 per cent on beating estimates for user growth and revenue.
Strong results from the social media firms set a positive precedent for Facebook Inc, which rose 3.0 per cent ahead of its second-quarter results next week.
The S&P 500 communication services sector index, added 1.2 per cent to be the top gainer among the 11 major S&P sectors.
“Earnings are expected to be much better for the value side than for growth, but with interest rates being as low as they are, investors will be sticking to growth because that way the near-term momentum is on their side,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Other major growth names, including Amazon.com, Apple Inc, and Microsoft Corp, also climbed between 0.2 per cent and 0.8 per cent.
American Express Co jumped 3.3 per cent and was the top boost to the S&P 500 financials sector after its second-quarter profit blew past expectations.
Intel Corp dropped 5.3 per cent, leading the declines on the Philadelphia SE Semiconductor index, after it gave an annual sales forecast that implied a weak end of the year.
The second-quarter earnings season barrelled ahead, with 120 companies in the S&P 500 having reported numbers so far. Of those, 88.3 per cent have beaten consensus estimates, according to Refinitiv data.
Wall Street investors have shifted between growth stocks and economically sensitive value shares this week, after concerns about the spread of the Delta coronavirus variant roiled markets and sparked a flight to the perceived safety of bond markets on Monday.
The major indexes were set for their fourth weekly gain in five weeks on a boost from strong earnings reports, while the blue-chip Dow Jones Industrial Average and the benchmark S&P 500 index inched closer to their record highs hit last week.
Meanwhile, data firm IHS Markit said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a four-month low of 59.7 from 63.7 in June.
The Federal Reserve’s policy meeting next week will be closely watched for further hints about tapering amid a spike in Covid-19 cases, though Chair Jerome Powell has repeatedly said the labour market remains well short of its target.
At 10.07am ET, the Dow Jones Industrial Average was up 136.95 points, or 0.39 per cent, at 34,960.30, the S&P 500 was up 19.03 points, or 0.44 per cent, at 4,386.51, and the Nasdaq Composite was up 38.40 points, or 0.26 per cent, at 14,723.00.
Schlumberger NV added 0.3 per cent after it reported a rise in its second-quarter profit as oilfield activity rebounded.
Advancing issues outnumbered decliners by a 1.21-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.55-to-1 ratio on the Nasdaq.
The S&P index recorded 58 new 52-week highs and no new low, while the Nasdaq recorded 64 new highs and 90 new lows. — Reuters
