Nasdaq, S&P hit record highs as tech, health stocks rise

A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, US.
A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, US.PHOTO: REUTERS

NEW YORK (REUTERS) - The Nasdaq and the S&P 500 opened at record highs on Wednesday, powered by technology and healthcare stocks, while the Dow was weighed down by a fall in IBM's shares.

IBM fell 3.9 per cent after the company's quarterly revenue came in below expectations.

The tech-heavy Nasdaq closed at a record high on Tuesday, helped by a jump in Netflix, with the index posting its longest streak of gains since February 2015.

The S&P tech sector has been the best performing sector this year despite concerns about stretched valuations as investors look for growth sectors immune to policy uncertainties. "Netflix's strong results has caused money to move to tech stocks in anticipation of stronger earnings," said Adam Sarhan, chief executive officer at 50 Park Investments.

"If the big names such as Alphabet, Facebook, Amazon are able to show growth in an otherwise low-growth environment, then investors will pay for these stocks."

All three big tech names will report results next week.

Microsoft, which reports results on Thursday, was up 0.6 per cent and was among the biggest boosts to the S&P and the Nasdaq.

At 9:45 a.m. ET (9:45 p.m. Singapore time), the Dow Jones Industrial Average was up 4.76 points, or 0.02 per cent, at 21,579.49, the S&P 500 was up 6.35 points, or 0.25 per cent, at 2,466.96. The Nasdaq Composite was up 30.37 points, or 0.48 per cent, at 6,374.67.

Eight of the 11 major S&P 500 sectors were higher, with the health index's 0.78 per cent rise leading the advancers.

Investors will continue to focus on quarterly earnings to see if high valuations are justified in the face of mixed economic data, tepid inflation and policy gridlock in Washington.

Analysts estimate an 8.5 per cent rise in second-quarter earnings and a 4.7 per cent increase in revenue for the S&P 500 companies from a year earlier, according to Thomson Reuters I/B/E/S.