Wall Street gained on Wednesday and the S&P 500 and Dow industrials set fresh records, as Microsoft’s strong results boosted the indexes and marked the latest sign that USA corporate earnings season may be less dour than feared.
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The Dow Jones Industrial Average dropped 78 points, or 0.4%, to 18517, and the S&P 500 fell 0.4%.
Contracts on the S&P 500 expiring in September fell 0.1 percent to 2,165.25 at 8:59 a.m.in NY, after the underlying index closed Wednesday at a record for the sixth time in eight days. The S&P 500 was up 5 points to 2,169 and the Nasdaq increased by 22 points to 5,059 to begin the day.
The Nasdaq Composite was up 23.94 points, or 0.47 percent, at 5,097.85. The stock led the health sector 0.4 percent higher, making it the biggest gainer among the 10 major S&P sectors.
GLOBAL MARKETS: Japan’s Nikkei 225 index jumped 1.4 percent on a weaker yen and a Pokemon-powered rally in Nintendo shares.
The Dow is up 1,170 points, or 6.7 percent. The price of gold fell $14.30, or 1.1 percent, to $1,318.20 per ounce.
One exception was crude oil prices.
The big run up in stocks in recent weeks has pushed up stock prices to levels that have some Wall Street pros anxious about overvaluation. “What we saw from Microsoft and IBM gives us a sense that things in the USA are going well”.
US stock indexes were at a near standstill in Friday morning trading, the latest listless move for a market that took a decidedly slow-and-steady path to record highs in recent days.
Separately, the US Federal Housing Finance Agency (FHFA) house prices index rose 0.2% in May from an upwardly-revised 0.3% the previous month and compared to expectations for a gain of 0.4%. China’s Shanghai Composite Index was down 0.6 percent at 8,067.30. The strong results from the tech giant, which is best known for its software, was a strong performance from its cloud computing division.
“We think the current run-up in the USA market is sustainable based on the likelihood that the Fed is on hold indefinitely and the expectation of improving earnings in the second half of the year”, Louis P. Abel, chief investment officer at First Foundation Advisors, told TheStreet. It led the industrials sector down 0.8 per cent. Brent crude fell 27 cents, or 0.6 percent, to $46.69. Several companies including Intel and Southwest Airlines reported earnings that disappointed investors.
Stock markets overseas were mixed after the European Central Bank left interest rates at record lows but also said that it could add stimulus as it assesses the impact of the United Kingdom’s recent vote to leave the European Union.
The price of USA crude oil rose 29 cents to $44.94 per barrel.
The dollar hit its strongest level in four months against a basket of currencies as lofty stock prices and encouraging economic data revived wagers the Fed would raise interest rates later this year. SPDR Gold Shares fell 1%.
Intel shares were down 4.2 percent at $34.19 after it reported slowing revenue growth at its key data center business.
Markets have become calm enough that the VIX, an index that measures investors’ expectations of future volatility in the stock market, fell 2.2 percent and is near its lowest level since 2014. (NYSE: GS) fell at least 1% each. The dollar ticked up to 106.11 Japanese yen from 105.86 yen, and the euro slipped to $1.0957 from $1.1013.
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