Record Day on Nasdaq, US Indices Soar on Earnings Reports
The Nasdaq Composite rose to new, uncharted grounds as it hit a record high on Tuesday, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America.
Tuesday, April 25, 2017 - 00:00
The Nasdaq hit a record level of 6,036.02, breaching 6,000 for the first time, powered by gains in index heavyweights Apple and Microsoft. The index first touched the 5,000 mark on March 2000 as tech stocks bubbled before tumbling nearly 80 percent through October 2002.
The Dow Jones Industrial Average rose 232.23 points, or 1.12 percent, to 20,996.12, the S&P 500 gained 14.46 points, or 0.61 percent, to 2,388.61. Even the Russell 2000 got in on the action and hit an intraday record high.
Investor focus shifted to the US economy where corporate earnings and data on housing starts underpinned speculation that growth is poised to accelerate a day before Trump is expected to unveil a tax plan that would cut the upper corporate rate to 15 percent. Trump’s decision to impose a fresh tariff rekindled protectionist concern, while shares in Europe rose as political risk abated, though tensions around North Korea continued to simmer.
The S&P 500 touched its day's high after the Wall Street Journal reported on Trump's tax proposal, expected on Wednesday. Overall profits of S&P 500 companies are estimated to have risen 11.4 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.
The market is being driven by earnings coming from the Dow companies, the largest of the large, in particular Caterpillar, really driving on the theme that US corporate profitability is on track to provide some significant year-over-year earnings growth. That in and of itself is a fantastic story, and set's investors long-term anxiety at ease - for the moment.
The Loonie (Canadian dollar) dropped 0.5 percent to 1.35648 per dollar as Trump intensified a trade dispute with Canada, slapping tariffs of up to 24 percent on imported softwood lumber. Mexico’s peso also lost 0.8 percent to 18.8893 per dollar, as NAFTA's power dwindles.
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