Nasdaq hits record, S&P nears all-time high on upbeat earnings

The S&P 500 moved closer to its all-time high on Wednesday, while technology stocks nudged the Nasdaq to a record level, as investors took heart from a largely upbeat earnings season.

The S&P 500 is just 6 points shy of its intra-day record high of 2,940.91 hit in late September. The index has rallied 17% this year, supported by a dovish Federal Reserve, hopes of a US-China trade resolution and a largely upbeat earnings season.

Boeing gained 0.6% after the planemaker scrapped its 2019 outlook and reported quarterly revenue below estimates due to grounding of its 737 MAX jets. Its shares have lost 11% since the deadly Ethiopian crash in early March. Boeing on Wednesday abandoned its 2019 financial outlook, halted share buybacks and said lowered production due to the grounding of its fastest-selling 737 MAX jet after two fatal plane crashes in five months had cost it at least $1 billion so far.

Caterpillar Inc fell 2.4% as rising costs hit margins in its construction equipment business and the company reported tepid sales in the Asia Pacific region.

Profits of S&P 500 companies are expected to decline 1.1% for the first quarter, according to Refinitv data. However, the estimates have improved since the start of April, with 77.5% of the 129 companies that have reported so far surpassing earnings estimates.

At 11:29am, the Dow Jones Industrial Average was down 10.90 points, or 0.04%, at 26,645.49. The S&P 500 was up 0.44 points, or 0.01%, at 2,934.12 and the Nasdaq Composite was up 10.45 points, or 0.13%, at 8,131.27.

US President Donald Trump sounded upbeat about the ongoing US-China trade talks as the two sides worked on hammering out a final deal.

Microsoft Corp and Facebook Inc, set to report after the closing bell on Wednesday, were down slightly.

Chip stocks rose as much as 1.9% to a record high after shares of Texas Instruments clawed back losses.

EBay Inc shares jumped 4.9% after the company raised its full-year sales and profit forecasts.

AT&T Inc shares declined 4% after the second-largest US wireless carrier reported quarterly revenue below Wall Street estimates.

Anadarko Petroleum Corp shares jumped 12.1%, providing the biggest boost to the S&P 500, after Occidental Petroleum Corp sought to scuttle Chevron Corp’s takeover of the company with a $57 billion bid. Occidental’s shares fell 3%.

Advancing issues outnumbered decliners by a 1.37-to-1 ratio on the NYSE and a 1.18-to-1 ratio on the Nasdaq.

The S&P index recorded 46 new 52-week highs and one new low, while the Nasdaq recorded 77 new highs and 23 new lows.

Separately, The euro fell against the US dollar on Wednesday after data showing a surprise deterioration in business morale in Germany stoked fears of slowing global growth and weighed on a gauge of world equity markets.

The decline in the Munich-based Ifo economic institute’s business climate index bucked expectations for a small improvement and sent US Treasury yields reeling as investors piled into safe-haven bonds.

Reports of a sharp slowdown in Australian inflation also lifted bond prices, while Premier Li Keqiang in China said authorities should not underestimate the difficulties in the Chinese economy, adding to concerns about global growth.

Signals that China has put broader stimulus on hold curbed demand for European equities and overshadowed strong earnings from the likes of Credit Suisse and SAP, which led Germany’s DAX index index to rise 0.45%.

MSCI’s gauge of stocks across the globe shed 0.14%, and the pan-European STOXX 600 index also lost 0.14%.

Wall Street shrugged off some earnings misses and rose slightly. Boeing Co gained 0.8% after the planemaker reported first-quarter free cash flow that was ahead of many analysts’ estimates, helped by improved performance from its 787 Dreamliner programme. The dollar index, which measures the US currency against a basket of six major rivals, was up 0.12% at 97.753, its highest since June 2017.

The euro was down 0.26% at $1.1196, while the Japanese yen strengthened 0.09% versus the greenback at 111.78 per dollar.

In a sign of bullish sentiment, the Treasury yield curve continued to steepen, hitting its widest level since November 2018. Benchmark 10-year notes last rose 14/32 in price to push their yield down to 2.5217%.

Oil prices steadied near six-month highs after data that showed US stockpiles rose to their highest since October 2017. That countered fears of tight supply resulting from Opec output cuts and US sanctions on Venezuela and Iran.

Meanwhile, gold steadied on Wednesday, crawling up slightly from the lowest in nearly four months hit during the previous session, with bullion pressured by a robust dollar as US stocks took a breather following a strong rally.

Spot gold was up 0.2 per cent at $1,274.24 per ounce as of 11:06am, a day after hitting its lowest since Dec. 26 at $1,265.90. US gold futures rose 0.3 per cent to $1,276.30 an ounce.

This “insignificant move in gold is just a technical bounce from the hard sell-off yesterday,” said David Meger, director of metals trading at High Ridge Futures.

Agencies