US stocks rose, sending the S&P 500 Index to a fresh record, as investors showed confidence corporate earnings would not derail a rally that is headed toward a fifth week.
Equities rebounded, as some of the week’s best performers were among the biggest contributors to Friday’s climb. Microsoft Corp and Biogen Inc added to their strongest weekly increases since at least March. Verizon Communications Inc rose 1.3 percent as it was said to be near a deal to buy Yahoo Inc. Gains were tempered by disappointment that followed earnings from General Electric Co, Honeywell International Inc and Apple Inc supplier Skyworks Solutions Inc.
The S&P 500 rose 0.5 percent to 2,175.03 at 4pm in New York, a seventh all-time high in the past 10 sessions after going more than 13 months without one. The benchmark gained 0.6 percent this week, the smallest such advance in its four-week run.
The Dow Jones Industrial Average added 53.62 points, or 0.3 percent, to 18,570.85, and the NASDAQ Composite Index increased 0.5 percent. About 5.6 billion shares traded hands on US exchanges, 21 percent below the three-month average.
“It’s been a bit of a mixed bag, but you have to say that the earnings reports have been positive overall,” said Chuck Self, chief investment officer of iSectors LLC, an Appleton, Wisconsin-based asset manager. “There’s certainly no trend to the negative in the earnings reports at all. There is a question of valuations out there and with interest rates so low, it’s hard to figure out whether it’s true to value.”
The S&P 500 closed with the longest stretch of weekly gains since March. The benchmark on Wednesday posted its sixth record in eight sessions, while the Dow rose for nine straight days, its longest rally since 2013, before halting the advance on Thursday. Speculation that central banks will act to cushion any fallout from the UK’s vote to leave the EU and signs of a strengthening US economy have propelled stocks higher in recent weeks.
The earnings season has also spurred optimism corporate results will support equities near records. About a quarter of S&P 500 firms have released figures so far, of which 82 percent exceeded profit forecasts and 60 percent beat sales expectations. The flow is set to accelerate, with more than 180 companies scheduled to report results next week. Analysts forecast net income among S&P 500 members would slide 4.5 percent in the second quarter — improving from a 5.8 percent drop predicted a week ago — for a fifth straight decline.
Among shares rising after reporting results, Stanley Black & Decker Inc rallied 4.8 percent to a record, as the toolmaker’s sales and profit topped estimates. American Airlines Group Inc rose 4 percent after its profit also exceeded predictions, helped by lower fuel prices. Southwestern Energy Co surged 9.5 percent after posting a smaller loss than estimated, and the company boosted its production outlook.
“We’ve had a major rise in global equities for almost a month; this has been accelerated during the earnings season,” said Christian Gattiker, head of research at Julius Baer Group in Zurich. “This is now a time of digesting these rises. Next week is really a bumper in terms of earnings, so everyone is looking at that. Overall it’s been a decent earnings season so far.”
While better-than-forecast data has helped push stocks to fresh highs, it has also lifted odds of a US Federal Reserve interest-rate increase. Traders are pricing in a 46 percent chance of higher borrowing costs by December, up from about 21 percent two weeks ago, and a less than 8 percent probability after the two-day equity selloff following the Brexit vote.
“The turn in economic data is what the stock market move has been discounting, stronger economic news and better earnings in the second half of the year,” Doug Ramsey, chief investment officer of Leuthold Weeden Capital Management LLC, said in an interview on Bloomberg TV. “The S&P held very firm and this move off the February lows, and even more recently off the Brexit lows has been very powerful and broad.”
In Friday’s trading, the CBOE Volatility Index fell 5.7 percent to 12.02, sinking for the seventh time in eight days. The measure of market turbulence known as the VIX on Friday snapped its longest streak of declines in three months with its biggest climb since June 24, the day after the Brexit vote. A Goldman Sachs Group Inc basket of most shorted shares briefly touched an eight-month high.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day