Earnings boost stocks to fresh highs
Strong company earnings put investors in a buying mood Thursday, lifting the major U.S. stock indexes to record highs.
Banks and other financial companies led the rally as bond yields rose. Energy also notched big gains as crude oil prices rose. Utilities and materials lagged behind the broader market.
Traders have been focused in recent weeks on companies reporting their quarterly results as they size up corporate America’s prospects for growth. They’re also keeping an eye on Washington to gauge whether the Trump administration will deliver on expectations of business-friendly policies that helped drive a market rally last fall.
“You’re definitely seeing a kind of risk-on [trade] right now, with the fear of missing out overshadowing the fear of a policy mistake,” said Chris Zaccarelli, chief investment officer for Cornerstone Financial.
About 61% of the companies in the S&P 500 had reported earnings as of Wednesday. Going by those results, company earnings in the October-through-December quarter are up 6.7% from a year earlier, according to S&P Global Market Intelligence.
Investors bid up shares in companies that turned in better earnings or outlooks than Wall Street was expecting, including Gannett, Kellogg and Dunkin’ Brands.
Gannett, publisher of USA Today and other newspapers, advanced 4% to $9.05. Kellogg rose 4% to $76.44. Dunkin’ Brands climbed 4.2% to $54.13.
Yum Brands got a lift thanks to stronger U.S. sales at its KFC and Taco Bell chains, which offset weakness at the company’s Pizza Hut restaurants. Its shares went up 1.2% to $67.39.
Results from several companies failed to impress investors.
Coca-Cola sank 1.8% to $41.25 after it reported that its profit fell 55% in the most recent quarter.
Dun & Bradstreet tumbled 16.8% to $101.88 after the business information provider said it expects less revenue from a partnership with Salesforce this year. The stock was the biggest loser in the S&P 500.
Benchmark U.S. crude rose 66 cents, or 1.3%, to $53 a barrel. Brent crude, the benchmark for international oil prices, rose 51 cents, or about 1%, to $55.63 a barrel.
Wholesale gasoline advanced 2 cents to $1.57 a gallon. Heating oil rose 1 cent to $1.64 a gallon. Natural gas futures rose 2 cents to $3.14 per 1,000 cubic feet.
The dollar rose to 113.33 yen from 112.05 yen. The euro fell to $1.0658 from $1.0687.
Bond prices fell. The 10year Treasury yield rose to 2.39% from 2.34%.
Gold fell $2.70 to $1,236.80 an ounce. Silver rose 4 cents to $17.74 an ounce. Copper slid 1 cent to $2.65 a pound.