USA stocks have ticked up, just enough for the S&P 500 and Dow industrials to set record highs, with investors expecting upbeat earnings to keep the rally going.
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Sectors that investors tend to favor when they’re nervous, including utilities, phone companies and makers of consumer staples, all fell as investors moved money out of lower-risk assets.
In percentage terms, the S&P 500 ended almost flat and the Dow was only slightly higher after a more than 4 per cent plunge in oil prices hurt energy shares and investors awaited second-quarter corporate earnings.
The Dow Jones industrial average rose 134 points, or 0.7 percent, to 18,506.
The S&P 500 gained 11.32 points, or 0.5 percent, to 2,163.75. The Nasdaq Composite .IXIC ended up 28.33 points, or 0.57 percent, at 5,034.06.
The Dow Jones industrial average was within 1 percent of its own closing high, which was also set in May past year.
Nasdaq-listed companies with larger declines included biotech company Celgene, down 1.6 percent, video game developer Electronic Arts, down 2.4 percent, and Tesla Motors, down 0.9 percent.
The surge in USA stocks comes after the Dow had one of its worst days ever, dropping 610 points, to 17,400.75, on June 24, the day the United Kingdom voted to leave the European Union.
“After three or four quarters of an aggregate earnings decline for S&P 500 companies, due to decimated profits from oil and gas companies and a strong US dollar, earnings may finally begin to bottom and perk up in the second-half of 2016”, analyst Jason Ware, chief investment officer at Utah-based Albion Financial, said Tuesday. USA crude CLc1 was last up 1.25 percent at $45.31 per barrel.
European stocks also moved notably higher on the day.
MSCI’s broadest index of Asia-Pacific shares outside Japan were down 0.1 percent in early trade but stood near its eight-month peak hit on Wednesday.
Andrew Adams, a technical analyst at Raymond James, says the stock market’s recent breakout to new highs bodes well for additional upside.
Significant strength was also visible among electronic storage stocks, as reflected by the 4.6 percent gain posted by the NYSE Arca Disk Drive Index.
The US crude oil prices fell 4.4% to $US44.75 a barrel, its lowest settlement since May 10 after federal data had shown domestic inventories of crude oil and refined products were at a record high.
The price of gold fell $21.30 to $1,335.30, silver fell 13 cents to $20.17 an ounce and copper rose 7 cents to $2.21 a pound. In addition to topping profit forecasts, investors were encouraged by strong trading revenue for the quarter.
US Treasury yields dropped, with the 2-year yield by 0.66% and the 10-year yield near 1.46%.
The US dollar hit its highest level in more than two weeks against the yen of 104.65 yen on the global risk appetite and anticipation of more Japanese stimulus.
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U.S. crude oil price dropped to a two-month low of $44.75 (£34.06; €40.35) a barrel.
