NEW YORK (REUTERS) - The S&P 500 on Tuesday (July 24) closed at its highest level since Feb 1 as Alphabet's blowout results bolstered expectations of a robust earnings season.
Alphabet shares touched a record high of US$1,275.00 after the online search company's quarterly results surpassed Wall Street estimates. The shares closed up 3.9 per cent at US$1,258.15.
Google's parent company was the biggest boost to the S&P 500. Others in the FANG group of momentum stocks rose as well. Shares of Facebook and Amazon were up 1.8 per cent and 1.5 per cent, respectively. Both companies report earnings later this week.
"We've seen some positive returns come in today," said Emily Roland, head of capital markets research at John Hancock Investments in Boston. "Investors are able to focus on fundamentals again and look at what's happening from an earnings standpoint."
The Dow Jones Industrial Average rose 197.65 points, or 0.79 per cent, to 25,241.94, while the S&P 500 gained 13.42 points, or 0.48 per cent, to 2,820.4.
The Nasdaq Composite dropped 1.11 points, or 0.01 per cent, to 7,840.77. It reversed course after having hit a record high earlier in the session.
So far in 2018, the Nasdaq has climbed 13.6 per cent, more than twice the 5.5 per cent gain of the S&P 500. Some investors said the Nasdaq's reversal indicated some profit-taking driven by lingering concerns over trade issues. Earlier on Tuesday, US President Donald Trump extolled tariffs in a post on Twitter.
"It leads me to believe that underneath it all, investors are worried about the tariff situation and what the implications are going to be for corporate profits in the third quarter,"said Jim Awad, senior managing director at Hartland & Co in New York. "If you're looking to raise cash because you're uncertain, you take it where you have the biggest profits."
Agriculture-related stocks gained on news that the Trump administration plans to announce aid for US farmers to help protect them from potential impacts related to the trade war between the United States and other countries.
Deere & Co shares rose 3.2 per cent, while shares of Caterpillar Inc advanced 1.2 per cent. AGCO Corp shares edged up 0.6 per cent.
Harley-Davidson Inc climbed 7.7 per cent after its profit beat estimates and the company forecast a lower-than-expected hit to margins from tariffs.
Whirlpool Corp tumbled 14.5 per cent to a more than two-year low after reporting weak quarterly results and cutting its full-year forecasts.
Shares of Biogen Inc rose 4.1 per cent and Eli Lilly and Co shares rose 5 per cent after the companies reported strong results. Biogen shares touched their highest level in three years, while Lilly shares jumped to their highest level since 2000.
Declining issues outnumbered advancing ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favoured decliners.
The S&P 500 posted 32 new 52-week highs and four new lows; the Nasdaq Composite recorded 118 new highs and 63 new lows.
Volume on US exchanges was 6.57 billion shares, compared to the 6.1 billion average for the full session over the last 20 trading days.