(FILES) This file photo taken on February 16, 2017 shows the New York Stock Exchange in New York. Wall Street stocks were back in record territory early July 26, 2017 on higher oil prices and another round of mostly good corporate earnings.Earnings standouts included Dow member Boeing, which jumped 6.6 percent after lifting its full-year profit forecast, and AT&T, which leaped 4.8 percent after it reported a surprising increase in wireless subscribers in the second quarter. / AFP PHOTO / Bryan R. Smith
NEW YORK: Wall Street got a big boost from strong corporate earnings on Wednesday, with all three major indexes hitting record highs, while investors awaited the outcome of a two-day Federal Reserve meeting.
Boeing surged 8.2% to an all-time high, while AT&T gained 4%, after the two companies posted higher-than-expected quarterly profit. The planemaker gave the biggest boost to the Dow and was the second biggest gainer on the S&P 500 after AT&T.
The market’s record run has left equities relatively expensive, but a strong corporate earnings season should allay some of those concerns.
Earnings of the S&P 500 companies are expected to have climbed 9.9% in the second quarter, up from an 8% rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.
“The earning season in general seems to be really quite strong and there haven’t been any significant surprises,” said Paul Springmeyer, investment managing director at US Bank Private Wealth Management.
“It’s still a very much earnings-driven environment and that is continuing to boost stocks.”
The S&P 500 is trading around 18 times earnings estimates for the next 12 months, well above its long-term average of 15 times.
The Fed’s statement, which is due at 2pm ET (1800 GMT), is also expected to keep investors occupied.
Although the central bank is not likely to raise interest rates, it is expected to discuss its monetary policy stance and the timing of a long-awaited balance sheet reduction. The Fed’s statement is due at 2pm ET (1800 GMT).
“We don’t really expect any changes coming out of today’s meeting and expect them to maintain status quo,” Springmeyer said. ”We will be looking out for any details about the balance sheet reduction.”
At 10:49am ET (1449 GMT), the Dow Jones Industrial Average was up 104.24 points, or 0.48%, at 21,717.67 and the S&P 500 was up 1.13 points, or 0.04%, at 2,478.26.
The Nasdaq Composite was up 10.40 points, or 0.16%, at 6,422.57.
Six of the 11 major S&P sectors were higher, with the telecommunications index’s 2.3% rise leading the gainers.
Amgen was down 2.2% after the biotechnology company’s sales for an infection fighter drug came in below expectations. The stock was the top drag on the S&P and the Nasdaq.
General Dynamics dropped 4.5% after the maker of jets, tanks and US Navy ships said it expects lower profit margins in the second half of 2017.
Advanced Micro Devices jumped 10.6% after the chipmaker raised its full-year revenue expectations.
Advancing issues outnumbered decliners on the NYSE by 1,373 to 1,324. On the Nasdaq, 1,362 issues rose and 1,283 fell. - Reuters
Limited time offer:
Just RM5 per month.
