Wall Street higher on U.S. growth optimism; Nasdaq hits record
Wall Street resumed its rally from last week, with the Nasdaq hitting a record high on Monday, as a recent batch of strong domestic economic data and largely upbeat earnings overshadowed fears about the impact of the coronavirus epidemic on global growth.
People returned to work in China after an extended new year holiday even as the country grappled with the epidemic that has now claimed more lives than Severe Acute Respiratory Syndrome (SARS).
“Some people think the outbreak may have a very decelerating impact on growth in China specifically,” said Peter Kenny, founder at Kenny’s Commentary LLC and Strategic Board Solutions LLC in New York.
“But at the end of the day, corporate earnings and U.S. economic data are very strong and we’re seeing more of that confidence being priced into stock performances.”
The benchmark S&P 500 posted its best week in eight months on Friday, while the Nasdaq recorded its biggest weekly percentage gain in more than a year.
Of the 324 S&P 500 companies that have reported quarterly results so far, about 71% have beaten earnings estimates, which is above the long-term average of 65%, according to IBES data from Refinitiv.
At 12:49 p.m. ET, the Dow Jones Industrial Average rose 0.14% to 29,144.45. The S&P 500 gained 0.26% to 3,336.39 and the Nasdaq Composite was up 0.54% at 9,572.02.
The defensive real estate index rose 0.7%, the most among 10 of the 11 major S&P sectors that were higher. Increased demand for safe havens also pressured U.S. Treasury yields.
A gain of 2.1% in Amazon.com Inc’s shares and a more than 1% rise in shares of Microsoft Corp and Alphabet Inc were among the top boosts to S&P 500 and the Nasdaq.
Electric carmaker Tesla Inc gained 1.6% as its Shanghai factory returned to service.
Apple Inc fell marginally as analysts predicted China’s smartphone sales may plunge by as much as 50% in the first quarter due to store closures and production suspensions following the outbreak.
Eli Lilly dropped 1.3% after experimental drugs from the U.S. pharmaceutical firm and Switzerland’s Roche failed to halt Alzheimer’s disease.
Advancing issues outnumbered decliners by a 1.16-to-1 ratio on the NYSE and by a 1.16-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs and three new lows, while the Nasdaq recorded 76 new highs and 75 new lows.