U.S. Stocks Set for New Record Highs
28 July 2017 - 12:11AM
Dow Jones News
By Georgi Kantchev
Gains in technology shares pushed U.S. stocks further into
record territory on Thursday.
The Dow Jones Industrial Average rose 37 points, or 0.2%, to
21748 shortly after the opening bell. The S&P 500 rose 0.2% and
the Nasdaq Composite added 0.6%.
U.S. stock indexes have climbed to fresh records this week as a
flurry of corporate earnings reports have largely pointed to
continued strength among U.S. firms.
With second-quarter results in from nearly half of S&P 500
companies, the broader index is poised to report earnings growth of
9% from the year-earlier period, according to FactSet. That would
build on gains from the first quarter, when U.S. companies reported
their fastest earnings growth in nearly six years.
"Earnings are coming in above expectations, which is justifying
the move up in equities," said Jeff Zipper, managing director at
the Private Client Reserve of U.S. Bank, which has $145 billion
under management. "At the same time, the weaker dollar is good for
multinationals' bottom lines."
Elsewhere, the Stoxx Europe 600 was down less than 0.1% after
fluctuating amid a flurry of earnings reports.
On Thursday, Royal Dutch Shell reported a sharp increase in cash
flow from operating activities to $11.3 billion. Shell's shares
gained 1.1%.
In South Korea, Samsung Electronics delivered its biggest-ever
quarter of profit.
Deutsche Bank beat analysts' expectations in the second quarter,
but revenue fell on the year in all three divisions of the German
lender. Deutsche Bank shares were down 3.7%.
At the Fed, officials voted unanimously to leave rates unchanged
and signaled that the central bank could start shrinking its
balance sheet "relatively soon." But tweaks in the Fed's statement
indicated that policy makers had grown more concerned about a
recent slowdown in inflation.
"As long as the next Fed moves are well telegraphed, it
shouldn't present a curveball for the market," Mr. Zipper said. "So
far, that seems to be the case."
Investors see a roughly 47% chance of a rate rise by the end of
2017, according to Fed-fund futures tracked by CME Group.
The Wall Street Journal Dollar Index, which tracks the greenback
against a basket of 16 currencies, was up 0.1%. The British pound
hit its highest level since September against the dollar, rising
0.2% to $1.314.
Yields on 10-year Treasurys rose to 2.294% on Thursday from
2.285% the previous day, while German bund yields fell to 0.525%.
Yields move inversely to prices.
In Asia, the Nikkei Stock Average gained 0.2% while Hong Kong's
Hang Seng Index was up 0.8% at a 2-year high.
In commodities, oil prices were down, with Brent crude, the
international benchmark, falling 0.5% to $50.85 a barrel. Gold was
up 1.1%.
Ese Erheriene contributed to this article.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
July 27, 2017 09:56 ET (13:56 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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