Strong earnings boost S&P, Dow; Alphabet drags Nasdaq
The S&P and the Dow were higher in late morning trading on Tuesday, helped by a string of strong quarterly earnings from companies, including McDonald`s and Caterpillar, while the Nasdaq was little changed as a fall in Alphabet weighed.
Shares of McDonald`s rose 3.5 percent and hit an all-time high after the fast-food giant posted the biggest rise in sales at established restaurants globally in five years.
Caterpillar was up 4.7 percent, touching a more than five-year high, after the company raised its full-year outlook for the second time this year.
"It looks like earnings are coming in better than expected and that`s giving the market a jump this morning," said Ken Moraif, senior adviser at Money Matters, a wealth management and investment firm.
However, Alphabet fell 3.3 percent, after the tech giant warned that expenses would remain high as more searches shift to mobile devices.
The S&P tech index has been the best performing sector this year, but there have been concerns about stretched valuations, putting earnings from big tech companies in the spotlight. The sector fell 0.3 percent on Tuesday, leading the decliners.
Amazon and Facebook, part of the high-flying "FANG" stocks, report results later this week, while Apple is due to report next week.
"My concern is that it seems like these companies can do no wrong and when you have so much concentrated on such a small group, eventually these stock prices are going to become unrealistic," Moraif said. "If the rest of the market isn`t there to support them, it could impact the sector in a big way."
Earnings are expected to have climbed 8.8 percent in the second quarter, compared with an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.
At 10:50 a.m. ET (1450 GMT), the Dow Jones Industrial Average was up 105.3 points, or 0.49 percent, at 21,618.47.
The S&P 500 was up 8.53 points, or 0.34 percent, at 2,478.44, slightly easing from its all-time high of 2,479.58.
The Nasdaq Composite was down 3.63 points, or 0.06 percent, at 6,407.17.
Seven of the 11 major S&P sectors were higher, with the energy index`s 1.66 percent rise leading the gainers.
The Fed kicks off a two-day meeting later in the day and while no rate hike is expected due to subdued inflation, the central bank`s statement on Wednesday will be parsed for clues on the pace of future rate hikes.
DuPont was up 1.5 percent after beating estimates for profit and results.
Eli Lilly was down 3.3 percent, while 3M fell 5.7 percent after reporting results.
Advancing issues outnumbered decliners on the NYSE by 1,808 to 944. On the Nasdaq, 1,679 issues rose and 1,006 fell.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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