Momentum stocks put S&P 500, Nasdaq on course for new highs
By Stephen Culp NEW YORK (Reuters) - Wall Street advanced on Wednesday as upbeat earnings kept investors focused on momentum stocks that have outperformed since the onset of the coronavirus pandemic. The gains set the S&P and the Nasdaq on track for their latest in a string of all-time closing highs, while the Dow, which has yet to reclaim its pre-COVID record, was only modestly higher. The MSCI world equity index surged past its February high to reach a record peak.
By Stephen Culp
NEW YORK (Reuters) - Wall Street advanced on Wednesday as upbeat earnings kept investors focused on momentum stocks that have outperformed since the onset of the coronavirus pandemic.
The gains set the S&P and the Nasdaq on track for their latest in a string of all-time closing highs, while the Dow, which has yet to reclaim its pre-COVID record, was only modestly higher.
The MSCI world equity index <.MIWD00000PUS> surged past its February high to reach a record peak.
Cyclical stocks, which tend to perform well in times of economic recovery, were mostly lower.
"Markets are singing the same tune," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "The market continues to move higher on momentum buying, and of course it's the same Nasdaq group all the time."
"There's no indication of any real shift in leadership," Cardillo added.
Energy <.SPNY> was the biggest percentage loser among S&P 500 sectors, dropping 1.6% as Hurricane Laura bore down on the Texas-Louisiana coastline, posing the largest threat to U.S. energy assets since 2005's Hurricane Katrina. The coming storm, now expected to strengthen to category 4, prompted crude producers and refiners to shut down their facilities.
Commercial air carrier stocks lost altitude, with the S&P 1500 Airline index <.SPCOMAIR> dipping 1.5% even after the White House announced President Trump was weighing an executive action to avoid massive layoffs in the sector.
The U.S. Federal Reserve is expected to unveil a new framework intended to soften the central bank's inflation stance, which Chairman Jerome Powell is expected to address during his remarks on Thursday as part of the Kansas City Fed's virtual Jackson Hole symposium.
The Dow Jones Industrial Average <.DJI> rose 23.67 points, or 0.08%, to 28,272.11, the S&P 500 <.SPX> gained 29.02 points, or 0.84%, to 3,472.64 and the Nasdaq Composite <.IXIC> added 183.82 points, or 1.6%, to 11,650.29.
Communications services <.SPLRCL> led the 11 major sectors in the S&P in percentage gains.
Second-quarter earnings season has wound down, with 483 of the companies in the S&P 500 having reported. Of those, 82.2% have beaten consensus, according to Refinitiv data.
In aggregate, analysts now see earnings for the April to June quarter having dropped by 29.9% year-on-year, according to Refinitiv.
Hewlett Packard Enterprise Co
Apparel retailer Nordstrom Inc
Declining issues outnumbered advancing ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored decliners.
The S&P 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 83 new highs and 7 new lows.
(Reporting by Stephen Culp; Editing by Cynthia Osterman)
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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.