The trading floor is seen on the final day of trading for the year at the New York Stock Exchange (NYSE) in Manhattan, New York, US, December 29, 2017. Photo: Reuters/Andrew Kelly
The Dow eased slightly after hitting the 26,000 mark for the first time on Tuesday, as earnings season got off to a strong start following upbeat results from UnitedHealth and Citigroup.
The largest US health insurer rose 2.6 percent after reporting results that beat analysts’ estimates and raised full-year profit forecast.
Citigroup Inc rose 0.72 percent after the lender reported a profit that topped expectations as strength in consumer businesses made up for lower revenue from bond and currency trading.
Hopes of strong earnings, supported by a steep cut in corporate taxes, and solid global economic growth have bolstered Wall Street’s optimism in the start to 2018.
“There is really nothing in (the market‘s) way at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“Investors are liking the fact that companies are talking up earnings, more than they have done in the past. We’re going to see better earnings over the next 12 months and you need to buy stocks now to take advantage of that.”
More than three quarters of the 26 S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S.
At 10:57 a.m. ET, the Dow Jones industrial average was up 145.96 points, or 0.57 percent, at 25,949.15. If the index closes above 26,000, it would be the fastest 1,000-point rise. It ended above 25,000 on Jan. 4.
Boeing, UnitedHealth and Merck were the biggest boosts to the Dow.
The S&P 500 was up 7.94 points, or 0.28 percent, at 2,794.18 and the Nasdaq Composite was up 39.01 points, or 0.54 percent, at 7,300.07.
General Motors rose 2.4 percent after the company said it expected earnings in 2018 to be largely flat, compared with 2017, but that profits should pick up pace in 2019.
General Electric fell more than 3 percent after raising the prospect of breaking itself up and announced more than $11 billion in charges from its long-term care insurance portfolio and new US tax laws.
The S&P energy index fell 0.45 percent as Brent crude oil shed some of its recent gains, falling nearly $1 per barrel. [O/R]
Seven of the 11 major S&P sectors were higher, led by a 1.31 percent rise in the real estate index and a 0.72 percent gain in the healthcare index.
Merck surged more than 7 percent after early results from a key study showed its blockbuster drug Keytruda and two chemotherapy medicines helped lung cancer patients live longer and stopped the disease from advancing.
Johnson & Johnson rose 1.4 percent after brokerage Jefferies lifted its price target on the stock.
Amazon rose 1.9 percent, extending gains from last week when data showed US holiday spending surged to 12-year high, prompting price target hikes by brokerages.
Advancing issues outnumbered decliners on the NYSE by 1,793 to 1,051. On the Nasdaq, 1,845 issues rose and 1,016 fell.