Dow hits record high on strong earnings season

Traders work on the floor of the New York stock Exchange (NYSE).
Traders work on the floor of the New York stock Exchange (NYSE).PHOTO: AFP/GETTY IMAGES

WASHINGTON (REUTERS) - US stock indexes kicked off the month on a strong note, with the Dow coming within spitting distance of the 22,000 mark, powered by gains in Goldman Sachs and 3M .

The index had pierced through the 21,000 mark five months ago and had breached the 20,000 milestone in January. All eyes will be on the quarterly performance of Dow-component Apple, which reports results after the closing bell.

The iPhone maker's shares were little changed. Tech has been the best performing sector this year, despite the sector going through bouts of volatility of late on rising valuation concerns. The tech index was up 0.27 per cent in early trading. Investors have been counting on earnings to support high valuations for equities.

The S&P 500 is trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times. S&P 500 earnings are expected on average to have grown 10.8 per cent in the second quarter, according to Thomson Reuters I/B/E/S.

"It's been a very good earnings season so far which is helping to sustain US stocks at record highs and offset any disappointment with Donald Trump's inability to make progress on his growth policies," said Craig Erlam, senior market analyst at online forex broker Oanda.

The Dow hit a record closing high on Monday, helped by Boeing, while selling in technology companies kept the S&P 500 in check and pulled the Nasdaq lower.

At 9:40 a.m. ET (9:40 p.m. Singapore time), the Dow Jones Industrial Average was up 61.02 points, or 0.28 per cent, at 21,952.14 and the S&P 500 was up 4.19 points, or 0.16 per cent, at 2,474.49. The Nasdaq Composite was up 15.46 points, or 0.24 per cent, at 6,363.58.

Ten of the 11 major S&P sectors were higher, with the financial index's 0.39 per cent rise leading the advancers.

Economic data showed US consumer spending barely rose in June as income failed to increase for the first time in seven months.

Advancing issues outnumbered decliners on the NYSE by 1,625 to 934. On the Nasdaq, 1,296 issues rose and 971 fell.