S&P 500 touches all-time high as earnings drive stock gains

Alex Veiga, The Associated Press</span>
Published Tuesday, August 21, 2018 7:28AM EDT
Last Updated Tuesday, August 21, 2018 1:30PM EDT

U.S. stocks moved higher Tuesday afternoon, placing the S&P 500 on track for an all-time high. The benchmark index of large U.S. companies briefly traded just above its last closing high set seven months ago. The latest gains came as investors welcomed solid results from homebuilders, retailers and other companies. Technology stocks and banks also rose.

KEEPING SCORE: The S&P 500 rose 14 points, or 0.5 per cent, to 2,871 as of 1:18 p.m. Eastern Time. The Dow Jones Industrial Average gained 124 points, or 0.5 per cent, to 25,883. The Nasdaq composite added 70 points, or 0.9 per cent, to 7,891. The Russell 2000 index of smaller-company stocks picked up 22 points, or 1.3 per cent, to 1,721. The Russell 2000 was also on track to close at a record high.

RECORD TERRITORY: Shortly before 1 p.m. Eastern Time, the S&P 500 briefly crossed above its latest closing high of 2,872 set on Jan. 26. The market took a steep plunge immediately after that, in early February, and has been mostly clawing higher since then, with some bumps along the way, thanks to a still-recovering economy and a boom in corporate profits. Stocks have been buffeted by concerns about mounting trade tensions this spring and summer, particularly with China. Signs of potential progress have helped stocks rally in recent weeks. S&P Dow Jones Indices, which compiles the S&P 500, says that on Wednesday, the current bull market become the longest in history, beating the bull run of the 1990s.

THE QUOTE: "In the absence of any new bad news, the trend for the market continues to be higher, and money continues to slowly flow in," said Craig Birk, chief investment officer at Personal Capital. "Earnings season was phenomenal and that removed one worry. When people are just looking at companies and just looking at economic fundamentals, they feel good about things."

SOLID EARNINGS: Investors have had much to cheer about when it comes to company earnings this year, and the second-quarter reporting period has been no exception. Of the 93 per cent of the companies in the S&P 500 that have reported quarterly results, 62 per cent delivered earnings and revenue that beat analysts' forecasts, according to S&P Global Market Intelligence. The strong earnings have been a source of encouragement for investors at a time of uncertainty over the trade disputes between the U.S. some of its biggest trading partners.

HOME SWEET HOME: Toll Brothers jumped 13.3 per cent to $39.34 after the luxury homebuilder reported earnings that came in well ahead of what analysts were expecting. Other homebuilders also got a boost. Lennar gained 4.3 per cent to $53.33, while PulteGroup added 5 per cent to $29.54.

WEAR IT WELL: TJX climbed 4.5 per cent to $106.21 after the operator of T.J. Maxx, Marshalls and other discount retail chains reported quarterly earnings that topped Wall Street's forecasts. Several other retailers also moved higher, including Best Buy, which rose 2.6 per cent to $81.41.

HEALTHY QUARTER: Medtronic gained 5.7 per cent to $95.18 after the medical technology company's latest quarterly report card beat Wall Street's projections.

FREE TRADE: Discount brokers fell sharply after CNBC reported that JPMorgan Chase will offer free online trading. ETrade fell 3.2 per cent to $59.28. Charles Schwab lost 1.9 per cent to $50.44. TD Ameritrade slid 6.5 per cent to $56.25.

IN A JAM: J.M. Smucker slumped 5.9 per cent to $109.07 after the maker of Jif peanut butter, Crisco cooking oil and other products reported quarterly results that fell short of analysts' estimates. The company also trimmed its outlook for the year.

ENERGY: U.S. benchmark crude rose 1.2 per cent to $67.25 per barrel in New York. Brent crude, the standard for international oil prices, gained 0.4 per cent to $72.53 per barrel in London.

BOND YIELDS: Bond prices fell. The yield on the 10-year Treasury rose to 2.85 per cent from 2.82 per cent late Monday.

CURRENCIES: The dollar rose to 110.47 yen from 110.23 yen late Monday. The euro strengthened to $1.1566 from $1.1467.

MARKETS OVERSEAS: Germany's DAX added 0.4 per cent, while France's CAC 40 climbed 0.5 per cent. Britain's FTSE 100 slipped 0.3 per cent. In Asia, Japan's benchmark Nikkei 225 rose nearly 0.1 per cent, while Australia's S&P/ASX 200 lost nearly 1 per cent. South Korea's Kospi rose 1 per cent. Hong Kong's Hang Seng climbed 0.6 per cent. Shares were higher in Taiwan but fell in Singapore.

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