Nasdaq heads for fourth record this week as investors shrug off weak US GDP data

The US economy grew at a rate of 0.7 per cent in the first quarter, the Commerce Department said.
The US economy grew at a rate of 0.7 per cent in the first quarter, the Commerce Department said.PHOTO: AFP

WASHINGTON (BLOOMBERG, REUTERS) - The Nasdaq Composite Index is heading for its fourth record high this week as bellwethers Amazon.com and Google parent Alphabet reported results that exceeded estimates.

The Nasdaq, almost 42 per cent of which is tech stocks, rose 0.2 per cent at 9:40 a.m (9:40 p.m Singapore time) in New York while the S&P 500 Index and Dow Jones Industrial Average were little changed.

All three benchmarks have advanced at least 1.7 per cent this week, hitting or approaching record highs, as the first round of the French election eased risk that the European Union might unravel and the Trump administration released its guidelines for tax cuts.

Amazon rose 3.1 per cent to US$945.50, while Alphabet gained 4.2 per cent to US$928.50 after their quarterly results beat estimates. The two stocks also boosted the S&P 500 index.

Data showed gross domestic product increased at a 0.7 per cent annual rate, below the 1.2 per cent rise estimated by economists, as consumer spending barely increased and businesses invested less on inventories.

The economy grew at a pace of 2.1 per cent in the fourth quarter.

The major indexes are on track to end the month in positive territory, with the Nasdaq on track to post gains for the sixth straight month as the corporate earnings season continues to impress.

Overall profits of S&P 500 companies are estimated to have risen 12.4 per cent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S. While strong earnings have kept the market at or near record levels, persistent geopolitical tensions in North Korea and Syria have weighed on investors' minds.