S&P closes at record high as Apple, healthcare stocks help shrug off Delta worries
NEW YORK (Reuters) – Wall Street’s main indexes closed higher on Tuesday on gains in Apple and healthcare stocks, despite concerns over a surge in the Delta variant of the coronavirus taking some shine off an upbeat corporate earnings season.
Ten of the 11 S&P indexes traded higher, with the S&P 500 index setting a record closing high and energy stocks rebounding after getting hit by a dip in oil prices.
Apple Inc rose after sliding last week. Other heavyweight technology stocks, including Netflix Inc, Tesla Inc and Facebook Inc continued to edge lower, capping gains on the tech-heavy Nasdaq.
A clutch of U.S. companies, including industrial materials maker Dupont and Discovery Inc, reported better-than-expected quarterly results, but their shares fell as investors booked profits amid lofty stock valuations.
Rising cases of the Delta variant and signs that the domestic economic rebound has begun to slow have knocked the three main U.S. stock indexes off record highs, while a deepening regulatory scrutiny in China has sent jitters through the global technology sector.
Shares in U.S.- and European-listed gaming companies fell after a steep sell-off in China’s social media and video games group Tencent, driven by fears the sector could be next in regulators’ crosshairs. Unofficially, the Dow Jones Industrial Average rose 279.16 points, or 0.8%, to 35,117.32, the S&P 500 gained 36.14 points, or 0.82%, to 4,423.3 and the Nasdaq Composite added 80.23 points, or 0.55%, to 14,761.30.
The S&P 500’s previous record closing high was 4,422.30. Data on Tuesday showed U.S. factory orders rose 1.5% in June after a 2.3% increase in the previous month. Economists polled by Reuters had expected a rise of 1% in June.
Later in the week, focus will shift to data on the U.S. services sector and the monthly jobs report for July.
In M&A-driven moves, Translate Bio surged after France’s Sanofi agreed to buy the U.S. biotech company in a $3.2 billion deal.
Under Armour Inc and Ralph Lauren Corp both jumped after raising their annual revenue forecasts. Overall, earnings at S&P 500 firms are estimated to have climbed about 90% in the second quarter versus forecasts of 65.4% at the start of July, according to IBES data from Refinitiv.
“The earnings reports continue to come in very strong or stronger than people expect, which leads me to believe that people are underestimating the strength of recovery”, said Jamie Cox, Managing Partner at Harris Financial Group in Richmond, Virginia.
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