S&P 500, Nasdaq hit record ahead of tech earnings

THE S&P 500 and Nasdaq closed at record highs on Monday, fueled by Tesla, Inc. and other heavyweight growth stocks ahead of a deluge of earnings reports this week.

The Nasdaq’s record close confirmed the end of an 11% correction in the index that began after its previous record close on Feb. 12, with the index closing at a low on March 8.

In extended trade, Tesla dipped by about 0.4% after the electric car maker beat Wall Street expectations for first-quarter revenue. During Monday’s trading session, Tesla gained 1.2%.

Companies that constitute about 40% of the S&P 500’s market capitalization report from Tuesday through Thursday, including Microsoft Corp., Google parent Alphabet, Inc., Apple,

Inc. and Facebook, Inc. Shares of those companies also rose.

Seven of the 11 major S&P 500 sectors climbed, with the energy index leading with a 0.6% gain, while utilities and consumer staples declined.

Of 124 companies in the S&P 500 that have reported earnings so far, 85.5% have topped analyst estimates, with Refinitiv IBES data now predicting a 34.3% jump in profit growth.

“We’re way above the average for firms reporting earnings above estimates,” said Sal Bruno, chief investment officer at IndexIQ. “More important than the fact that they are beating estimates is that they are raising their expectations and outlooks going forward, and that’s giving the markets a nice boost.”

Investors will monitor a two-day Federal Reserve meeting beginning Tuesday, with the US central bank expected to shine some light on whether the employment landscape has affected its plan to leave interest rates near zero for an extended time and to continue buying $120 billion in bonds each month. Also on investors’ radar is a reading of first-quarter gross domestic product later this week to gauge the pace of economic recovery in the United States.

The Dow Jones Industrial Average fell by 0.18% to end at 33,981.57 points. The S&P 500 gained 0.18% to 4,187.62. The Nasdaq Composite gained 0.87% to 14,138.78.

Market participants are also watching out for any fresh developments on US President Joseph R. Biden’s tax plan after reports last week said he would seek to nearly double the capital gains tax to 39.6% for wealthy people.

Cryptocurrency and blockchain-related firms, including Riot Blockchain and Marathon Patent Group, surged by more than 5% as bitcoin snapped five straight days of losses.

Advancing issues outnumbered declining ones on the New York Stock Exchange (NYSE) by a 1.80 to 1 ratio; on Nasdaq, a 2.14 to 1 ratio favored advancers.

The S&P 500 posted 105 new 52-week highs and no new lows; the Nasdaq Composite recorded 154 new highs and 21 new lows.

In a moderately busy session, volume on US exchanges was 9.4 billion shares, compared with the 10 billion full-session average in the past 20 trading days. —