Alphabet, Starbucks drive Wall Street to record high
By Noel Randewich (Reuters) - Robust earnings from Alphabet and Starbucks pushed the S&P 500 and Nasdaq indexes to record highs on Friday, with support from data showing U.S. economic growth slowed less than expected in the second quarter. The U.S
By Noel Randewich
(Reuters) - Robust earnings from Alphabet and Starbucks pushed the S&P 500 and Nasdaq indexes to record highs on Friday, with support from data showing U.S. economic growth slowed less than expected in the second quarter.
The U.S. Commerce Department said GDP increased at an annualised rate of 2.1% in the second quarter, higher than a 1.8% rate forecast by economists polled by Reuters.
The GDP data further solidified wide expectations that the U.S. Federal Reserve will cut interest rates at its policy meeting next week. Those expectations have powered a solid run in stocks this month, helping Wall Street scale record levels.
"This is just what the market needed, not so soft that the economy is slowing down precipitously and not so strong that the Fed is going to reverse course," said Art Hogan, chief market strategist at National Securities in New York. "It shows that the economy is slowing, but not nearly enough to raise any red flags."
The data comes on the heels of European Central Bank President Mario Draghi's speech on Monday, which was less dovish than investors had anticipated and led the S&P 500 to post its first loss in the week.
Two weeks into the second-quarter earnings season, about 75% of the 218 S&P 500 companies that have reported so far have topped profit estimates, according to Refinitiv data.
Their upbeat earnings pushed the S&P 500 communication services index <.SPLRCL> up 3.25%, the most among S&P sectors.
Lead negotiators for China and the United States are set to meet in Shanghai on Tuesday for two days in the next round of talks aimed at settling the U.S.-China trade war. The results of those talks will affect sentiment on Wall Street.
"Going forward, it's very important not to have a breakdown in trade talks. And earnings reports need to continue to come in as they have been - a little better than expectations," said Tom Martin, a senior portfolio manager at GlobAlt Investments in Atlanta.
The Dow Jones Industrial Average <.DJI> rose 0.19% to end the week at 27,192.45 points, while the S&P 500 <.SPX> gained 0.74% to 3,025.86. The Nasdaq Composite <.IXIC> added 1.11% to 8,330.21.
For the week, the S&P 500 added 1.7%, the Nasdaq climbed 2.3% and the Dow rose 0.1%.
Even under the cloud of uncertainty related to trade conflict, the S&P 500 has risen 21% so far in 2019.
Also on Friday, McDonald's Corp
Advancing issues outnumbered declining ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 2.34-to-1 ratio favoured advancers.
The S&P 500 posted 41 new 52-week highs and two new lows; the Nasdaq Composite recorded 111 new highs and 79 new lows.
Volume on U.S. exchanges was 5.9 billion shares, compared with the 6.3 billion-share average for the full session over the last 20 trading days.
(Additional reporting by Amy Caren Daniel in Bengaluru; Editing by Cynthia Osterman and Jonathan Oatis)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.