Strong profit reports allow stocks to set more records

NEW YORK» U.S. stocks pushed to record highs Friday after strong profit reports from Google’s parent company, Twitter and other big corporations.

Companies are nearly midway through earnings reporting season, and results have generally been better than the dismal expectations that analysts had coming into it.

A government report released Friday showed that U.S. economic growth slowed during the spring, but it was still better than economists expected.

All the reports are emblematic of an economy that’s strengthening but still shadowed by a pile of concerns, which only bolsters investors’ expectations for the Federal Reserve to cut interest rates at its high-profile meeting next week. It would be the first cut in more than a decade, when the Fed was trying to shock the economy out of the Great Recession.

The S&P 500 index rose 22.19 points, or 0.7percent, to 3,025.86 and passed its previous record set Wednesday. The Dow Jones industrial average gained 51.47 points, or 0.2 percent, to 27,192.45, and the Nasdaq composite also set a record after jumping 91.67 points, or 1.1 percent, to 8,330.21.

Friday’s report on the U.S. economy showed that consumer spending remains strong, and employers continue to add jobs every month. But businesses are hesitant to invest, and manufacturing worldwide has slowed amid President Donald Trump’s trade war with China. Inflation also remains low.

Lower interest rates could boost economic activity and goose inflation higher. Investors also see them as a shot of adrenaline for stocks and other risky investments. This week, the European Central Bank held its key interest rate steady, but it made clear that more stimulus is on the way.

“Any time you hit a record high, you ask: Is this justified?” said David Joy, the chief market strategist at Ameriprise. “Well, it’s justified based on the easing cycle that central banks are on, and the absolute level of earnings helps. But growth is sluggish and moderating, earnings are flattish and we’ve got this overhang of, let’s call it geopolitical uncertainty. We say, ‘Let’s be a little cautious here.’ ”