Earnings boost Wall Street
The Nasdaq Composite hit a record high on Tuesday, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America. Caterpillar closed up 7.9% at $104.42 after earlier hitting a multi-year high of $104.89 and McDonald’s jumped 5.6% to $141.70, both after beating profit estimates.
NEW YORK — The Nasdaq Composite hit a record high on Tuesday, while the Dow and S&P 500 brushed against recent peaks as strong earnings underscored the health of corporate America.
Caterpillar closed up 7.90% at $104.42 after earlier hitting a multi-year high of $ 104.89 and McDonald’s jumped 5.60% to $141.70, both after beating profit estimates.
“It’s earnings coming from the Dow companies, the largest of the large, in particular Caterpillar, really driving on the theme that US corporate profitability is on track to provide some significant year-over-year earnings growth,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.
“That in and of itself is a fantastic story.”
Overall profits of S& P 500 companies are estimated to have risen 11.40% in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.
The Nasdaq hit a record level of 6,036.02, breaching 6,000 for the first time, powered by gains in index heavyweights Apple and Microsoft.
The index first touched the 5,000 mark on March 2000 as tech stocks bubbled before tumbling nearly 80% through October 2002.
The Dow Jones Industrial Average rose 232.23 points, or 1.12%, to 20,996.12, the S& P 500 gained 14.46 points, or 0.61%, to 2,388.61 and the Nasdaq Composite added 41.67 points, or 0.70%, to 6,025.49. The Russell 2000 also hit an intraday record high.
TRUMP TAX PROPOSAL AWAITED
The S&P 500 touched its day’s high after the Wall Street Journal reported US President Donald J. Trump’s tax proposal, expected on Wednesday, would include a slash to 15% from 39.6% on many owner-operated companies.
“(Treasury Secretary Steven) Mnuchin has to have a betterarticulated answer to what the tax code changes are in a meaningful way,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Ms. Forrest said cutting taxes on partnerships and owner-operated businesses would be a strong boost to investing.
Tuesday’s gains built on a dayearlier rally, which was driven by the victory of centrist candidate Emmanuel Macron in the first round of the French presidential election. Polls showed Mr. Macron, the market’s favorite, was likely to beat his far- right rival Marine Le Pen in a deciding vote on May 7.
About 7.31 billion shares changed hands in US exchanges, above the 6.4 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 2.10- to- 1 ratio; on Nasdaq, a 2.20-to-1 ratio favored advancers.
The S&P 500 posted 85 new 52-week highs and three new lows, while the Nasdaq Composite recorded 218 new highs and 43 new lows. —