NEW YORK–US stocks took another modest step further into record territory yesterday after several companies reported profits that were stronger than expected, if not strong. Technology stocks led the way following an encouraging report from Microsoft.
Both the Standard & Poor's 500 index and Dow Jones industrial average set all-time highs, and the Dow marked its ninth consecutive day of gains. It's the longest winning streak for the measure of blue-chip stocks since 2013, and it's been a decidedly slow-and-steady one. All but one of those days had a gain of less than 1 per cent.
The Standard & Poor's 500 index rose 9.24 points, or 0.4 per cent, to close at 2,173.02. The Dow Jones industrial average rose 36.02, or 0.2 per cent, to 18,595.03. The Nasdaq composite rose 53.56, or 1.1 per cent, to 5,089.93.
Companies are in the middle of telling investors how much they earned in the spring, and analysts are forecasting yet another decline from year-ago levels. The low expectations have made it easier for companies to come in above forecasts.
Microsoft surged to one of the biggest increases in the S&P 500 in the first day of trading after it reported quarterly results that easily beat analysts' expectations. The technology giant's stock jumped $2.82, or 5.3 percent, to $55.91 after it said momentum in its cloud-computing business helped it to return to a profit in its fiscal fourth quarter.
So far this reporting season, earnings for nearly two out of three companies have come in above analysts' expectations, according to S&P Global Markets Intelligence. That's what usually happens, because analysts tend to lower their earnings forecasts for companies as each reporting season approaches.
Several reports on the US economy have also come in better than expected in recent weeks, which has helped drive the run for stocks to a record.
Markets have become calm enough that the VIX, an index that measures investors' expectations of future volatility in the stock market, fell 2.2 per cent and is near its lowest level since 2014.
AP