S&P 500, Nasdaq end at record highs after solid earnings

Traders work on the floor at the New York Stock Exchange, April 23, 2019.
Traders work on the floor at the New York Stock Exchange, April 23, 2019.PHOTO: REUTERS

NEW YORK (AFP) - The S&P 500 and Nasdaq jumped to all-time records on Tuesday (April 23) following a barrage of mostly positive earnings reports that boosted confidence in the economic outlook.

The broad-based S&P 500 finished at 2,933.68, up 0.9 per cent and three points above the previous record in September.

The tech-rich Nasdaq Composite Index advanced 1.3 per cent to 8,120.82, also a record, while the Dow Jones Industrial Average gained 0.6 per cent, rising to 26,656.39, leaving it about 170 points short of its own all-time high.

Investors had been cautious heading into first-quarter earnings period, owing to expectations for an overall drop in profits.

But a broad range of companies charged higher on Tuesday following earnings reports, including defence giant Lockheed Martin, soft drinks company Coca-Cola, toymaker Hasbro and social media company Twitter.

The strong results have lifted expectations that stocks could continue to rise, even after an almost unbroken climb higher throughout 2019 so far.

"We are now seeing more signs of solid economic growth, as well as indications that companies not only are reporting better than expected first-quarter earnings, but also are continuing to guide for modest earnings growth throughout 2019," said Ms Kate Warne, an investment strategist at Edward Jones.

Not every company that reported results pushed higher. Procter & Gamble reported better-than-expected profits and a solid 5 per cent increase in organic sales, but still shed 2.7 per cent. Briefing.com attributed the drop to profit-taking.

Harley-Davidson dropped 2 per cent after reporting a 26.8 per cent decline in first-quarter earnings, due in part to the continued hit from European tariffs. United States President Donald Trump on Tuesday cited the company's plight in vowing to retaliate against the European Union.

But department store chain Kohl's surged 12 per cent after announcing it was expanding a pilot programme at 100 stores to accept returns for Amazon items. Kohl's will offer the programme at all of its more than 1,150 locations in the US, starting in July.