S&P, Dow at record highs; Nasdaq turns positive for 2016
The S&P 500 and the Dow hit record intraday highs on Tuesday, while the Nasdaq turned positive for the first time this year, buoyed by rising prospects of global economic health and with Alcoa getting the U.S. earnings season off to a promising start.
The S&P 500 .SPX hit 2,155.32, breaking past its previous record on Monday. The Dow hit an all-time high of 18,360.51.
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Alcoa's (AA.N) quarterly profit fell less than expected, sending the aluminum producer's shares to a five-month high of $10.67 and helping boost optimism about the earnings season.
Strong economic data and low returns on government bonds along with easing political tensions in Britain and Japan have reduced some global uncertainties and boosted investor appetite for equities.
"There are no good alternatives, from an income standpoint, to the U.S. equity markets at this point, and that's driving the momentum today," said Bill Northey, chief investment officer at Private Client Group of U.S. Bank.
"But we need to see some supporting earnings growth to accompany this move."
While profits of S&P 500 companies are estimated to have fallen 5 percent in the second quarter, mirroring the first, analysts see a return to growth throughout the second half of the year, according to Thomson Reuters data.
At 12:23 p.m. ET the Dow Jones industrial average .DJI was up 128.78 points, or 0.71 percent, at 18,355.71.
The S&P 500 .SPX was up 17.16 points, or 0.8 percent, at 2,154.32.
The Nasdaq Composite .IXIC was up 40.59 points, or 0.81 percent, at 5,029.23.
Among the 10 major S&P sectors, the traditionally defensive sectors, utilities .SPLRCU, telecoms .SPLRCL and consumer staples .SPLRCS fell. The three indexes have risen in double-digit percentages this year.
Oil's bounce off a two-month low boosted materials .SPLRCM and energy .SPNY shares.
Strong corporate reports, along with low expectations for a hike in interest rates anytime soon, should keep the momentum in the market going.
United Continental (UAL.N) jumped 7 percent after saying its quarterly passenger unit revenue would drop less than expected. The outlook also boost other airlines .SPLRCALI 3-9 percent.
Amazon.com (AMZN.O) hit a record high of $757.34 before slipping 0.6 percent. The retailer said it resolved a glitch some customers experienced at its "Prime Day" shopping event.
Advancing issues outnumbered decliners on the NYSE by 2,285 to 684. On the Nasdaq, 2,113 issues rose and 650 fell.
The S&P 500 index showed 69 new 52-week highs and one new low, while the Nasdaq recorded 154 new highs and 11 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)