Sun, Jan 28, 2018 - Page 14 News List

Intel, drugmakers lift Wall St to record

‘FERTILE BACKDROP’:Corporate earnings are justifying the moves on Wall Street and investors continue to see positive steps in the right direction, a strategist said

Reuters, NEW YORK

The latest round of strong earnings reports, including from Intel Corp and AbbVie Inc, along with continued weakness in the US dollar lifted each of the major Wall Street indices to closing records on Friday.

The three main indices notched their best four-week run since 2016.

Intel’s shares surged as high as US$50.15, their highest level since October 2000, and closed up 10.55 percent at US$50.08 after results indicated that the chipmaker’s shift to higher-margin data center business was working.

AbbVie’s shares jumped 13.77 percent after the drugmaker significantly boosted this year’s earnings forecast with help from US tax reform and said it hopes to accelerate dividend growth and share buybacks.

“We continue to see these positive steps in the right direction and definitely earnings are clearly justifying a lot of the recent move that we’ve had,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

Fourth-quarter earnings growth for the S&P 500 is estimated at 13.2 percent, according to Thomson Reuters data, up from 12 percent at the start of the year.

Of the 133 companies in the index that have reported through Friday, 79.7 percent have surpassed expectations.

The earnings enabled investors to shrug off a reading on economic growth that came in below expectations.

The US’ GDP increased at a 2.6 percent annual rate in the fourth quarter, the US Department of Commerce said in its advance GDP report, below the 3 percent forecast, as the strongest pace of consumer spending in three years resulted in a surge in imports.

“You have manufacturing and the consumer doing well at the same time and the globe is doing better, so that’s a path for future GDP gains, which has always provided a fertile backdrop for earnings gains,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management in Milwaukee.

Weakness in the US dollar, which is supportive for large multinational companies, continued.

The Dow Jones Industrial Average on Friday rose 223.92 points, or 0.85 percent, to 26,616.71, the S&P 500 gained 33.62 points, or 1.18 percent, to 2,872.87 and the NASDAQ Composite added 94.61 points, or 1.28 percent, to 7,505.77.

For the week, the Dow rose 2.08 percent, the S&P 500 gained 2.22 percent and the NASDAQ advanced 2.31 percent.

Buoyed by AbbVie, the S&P healthcare index gained 2.17 percent, scored its best day since November 2016 and was the best performer among the 11 major S&P sectors.

Also lifting the index were gains in Pfizer Inc, up 4.78 percent after a European regulator recommended granting marketing approval to a diabetes drug developed by the company and Merck & Co, up 1.21 percent.

Starbucks Corp dropped 4.23 percent after it said global cafe sales growth this year would be at the low end of its forecast.

Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.2-to-1 ratio; on NASDAQ, a 1.54-to-1 ratio favored advancers.

The S&P 500 posted 125 new 52-week highs and two new lows; the NASDAQ Composite recorded 178 new highs and 22 new lows.

Volume on US exchanges was 6.58 billion shares, compared with the 6.81 billion average for the full session over the past 20 trading days.

This story has been viewed 1634 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top