Connect with us

Hot world news

US stocks rise toward records following strong earnings

US stocks rise toward records following strong earnings


US stocks rise toward records following strong earnings


U.S. stock indexes climbed Friday following strong profit reports from Google’s parent company, Twitter and other big companies. The S&P 500 was on track to close out its third winning week in the last four.

Companies are nearly midway through earnings season, and reports have generally been better than the low expectations that analysts had coming into it. A government report on Friday also showed that U.S. economic growth slowed in the spring, down to an annual pace of 2.1% from 3.1% in the first three months of the year, but it was still stronger than economists expected.

All the reports show an economy that’s still strengthening, but with a growing pile of concerns, which investors say bolster their expectations for the Federal Reserve to cut interest rates at its meeting next week for the first time in more than a decade.

Consumer spending is strong, and employers continue to add jobs every month. But businesses are hesitant to invest, and manufacturing worldwide has slowed in the aftermath of President Donald Trump’s trade war.

Lower interest rates could boost economic activity and goose inflation higher. Investors also see them as a shot of adrenaline for stocks and other risky investments.

KEEPING SCORE: The S&P 500 was up 0.5% at 3,018, as of 10:05 a.m. Eastern time. It’s within 0.03% of its record, which was set on Wednesday.

The Dow Jones Industrial Average rose 44 points, or 0.2%, to 27,185, and the Nasdaq composite was up 0.9%.

NOT SO BAD CAN BE GOOD: Analysts came into this earnings reporting season expecting a drop of nearly 3% in earnings per share for S&P 500 companies. That would mean the second straight quarterly drop in profits, something that hadn’t happened for three years.

But while reports this earnings season have been less than overwhelming, they haven’t been terrible. Among the 44% of companies in the S&P 500 that have already reported, earnings have been up a little more than 1% from year-ago levels. That means analysts are now forecasting a more modest 2.3% drop for the S&P 500 index overall.

A FOR AWESOME: Alphabet, Google’s parent company, soared to the biggest gain in the S&P 500 after it reported much stronger profit growth than analysts expected. It also allayed investors’ concerns about advertising trends, after its revenue growth topped Wall Street’s forecast.

Alphabet shares surged 11% and were on pace for their biggest gain in four years.

SINGING: Twitter shares jumped 9.4% after it reported stronger user numbers and revenue for the second quarter than investors expected.

The big gains for Alphabet and Twitter meant stocks in the communications sector were the best performers in the S&P 500, up 2.9%. That was more than quadruple the gain of any of the other 10 sectors that make up the index.


AP Business Writer Yuri Kageyama contributed from Tokyo.


Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published.


To Top
error: Content is protected !!