By Devik Jain and Shashank Nayar
(Reuters) – The Nasdaq hit a record high on Thursday, led by mega-cap companies Apple, Amazon.com and Tesla, while solid results from Caterpillar and Merck helped investors shrug off signs of slowing economic growth.
Ten of the 11 major S&P sectors advanced, with technology hitting an all-time high and consumer discretionary rising more than 1%.
Shares of Tesla Inc rose 3.4%. Apple and e-commerce giant Amazon.com gained 2.6% and 1.9%, respectively, ahead of their earnings reports later in the day that would wrap up a largely upbeat reporting season for Wall Street’s tech titans.
Ford Motor Co jumped 8.4% after the carmaker topped third-quarter profit estimates and raised its full-year earnings forecast.
Caterpillar Inc added 3.2% after reporting a better-than-expected quarterly profit on rising commodity prices, while a forecast raise by drugmaker Merck & Co Inc helped its shares gain 4.6%.
“We are still favorable on US equities and don’t expect any near term reasons for the bullishness to fade which is led on by strong earnings,” said James Gaul, portfolio manager at Knights of Columbus Asset Advisors.
“There are supply chain issues affecting short-term results but there is anticipation for strong demand and supply issues subsiding going ahead, and for all major sectors the long term is attractive.”
The Commerce Department’s report showed the U.S. economy grew at a 2% annualized rate in the third quarter as COVID-19 infections flared up, while another set of data showed fewer Americans filed new claims for unemployment benefits last week.
“Slower growth in Q3 was the result of a normalization of spending activity and the significant bottlenecks that remained … it will not dissuade the Fed from deciding on a gradual end to its bond purchases next week, given the good situation on the labor market and increasing price risks,” Bernd Weidensteiner, senior economist at Commerzbank, said in a note.
Stellar earnings reports have driven the benchmark S&P 500 index and the Dow Jones Industrial Average to record highs this week, with analysts expecting profits for S&P 500 companies to grow 38.6% year-on-year in the third quarter.
At 11:57 a.m. ET, the Dow Jones Industrial Average was up 137.92 points, or 0.39%, at 35,628.61, the S&P 500 was up 33.32 points, or 0.73%, at 4,585.00, and the Nasdaq Composite was up 165.59 points, or 1.09%, at 15,401.42.
Tech and growth stocks also got a boost from a pullback in the U.S. 10-year Treasury yield, which had hit its highest level since mid-May last week on inflation and rate-hike concerns. [US/]
President Joe Biden said he had secured a new $1.75 trillion framework for economic and climate change spending that could pass the Senate, and expressed confidence it would win the backing of all wings of the Democratic Party.
Among the biggest losers, EBay Inc fell 7.5% after the e-commerce firm forecast downbeat holiday-quarter revenue.
Advancing issues outnumbered decliners by a 1.95-to-1 ratio on the NYSE and by a 2.22-to-1 ratio on the Nasdaq.
The S&P index recorded 30 new 52-week highs and three new lows, while the Nasdaq recorded 77 new highs and 76 new lows.
(Reporting by Devik Jain and Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Aditya Soni)
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