S&P 500 and Nasdaq hit record highs, driven by strong corporate earnings

Marco Green
April 24, 2019

The S&P 500 has now recovered all of the ground it lost last fall, gaining 24.8% since it hit a bottom on Christmas Eve.

Profits of S&P 500 companies are expected to decline 1.3% in the first quarter, in what analysts say could be the first earnings contraction since 2016.

Lockheed Martin Corp jumped 5.8% after it reported upbeat quarterly results and lifted its full-year profit forecast on strong demand for its missiles and fighter jets.

The stock market has rebounded sharply this year after a steep sell-off in December that pulled the S&P 500 just 0.2% from entering a bear market, or decline of 20% from its peak.

Reuters-polled economists are expecting headline quarterly inflation of 0.2 per cent, which is a 1.5 per cent increase over previous year.

And the uncertainty over the costly trade dispute between the USA and China has eased in recent weeks amid signs that both sides are making progress toward reaching a resolution.

The S&P 500 hit an all-time high Tuesday, marking the stock market's complete recovery from a nosedive at the end of past year.

At 2:48 p.m. ET, the Dow Jones Industrial Average rose 136.16 points, or 0.51%, to 26,647.21, the S&P 500 gained 26.69 points, or 0.92%, to 2,934.66 and the Nasdaq Composite added 109.64 points, or 1.37%, to 8,124.91.

The Nasdaq index also closed at a record high Tuesday.

The Dow Jones Industrial Average rose 145 points, or 0.6%, to 26,656.

Small-company stocks rose much more than the rest of the market, a bullish sign indicating that investors were more willing to take on risk.

Stocks are under a little less pressure following the latest round of earnings results.

"There has been concern about a synchronized global slowdown in some of these more cyclical companies, like industrials, so we're seeing some earnings which is soothing concerns", said Jeff Zipper managing director of Investments at U.S. Bank Wealth Management in Palm Beach, Florida.

"People just realized (healthcare) got beaten so far down it might be worth taking a chance", said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in NY.

Twitter's solid report is a good sign for social media companies that have been struggling, Kinahan said. "That's what's driving the markets", said Roth citing results from United Technologies Corp, Lockheed Martin Corp and Coca-Cola Co.

Australian shares are set to open modestly higher after a record-breaking session on Wall Street, boosted by stronger-than-expected corporate earnings.

Other big names such as Caterpillar, Boeing and Microsoft are all scheduled to post earnings on Wednesday, numbers which will be closely watched to see if the optimism can continue.

Other reports by Click Lancashire

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