By Yashaswini Swamynathan
The Nasdaq hit 6,000 for the first time on Tuesday and the Dow surged more than 200 points as strong earnings underscored the health of Corporate America.The tech-heavy Nasdaq rose as much as 0.65 percent to hit a record level of 6,022.65, powered by gains in index heavyweights Apple and Microsoft. The index had breached the 5,000 mark on March 7, 2000 and closed above that level two days later during the height of the tech boom.Tuesday's gains build on a day-earlier rally, which was driven by the victory of centrist candidate Emmanuel Macron in the first round of the French presidential election. Polls show Macron is likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7."Political headlines in Europe don't tend to stick, but create buying opportunities more than having long-term consequences," said Stephen Wood, chief market strategist at Russell Investments.
Investors are keeping a close watch on the latest earnings season, hoping that companies will justify their lofty valuations, spurred in part by President Donald Trump's pro-growth promises.Overall profits of S&P 500 companies are estimated to have risen 11 percent in the first quarter - the most since 2011, according to Thomson Reuters I/B/E/S.Trump, who had promised to make "a big tax reform" announcement on Wednesday, has directed his aides to move quickly on a plan to cut the corporate income tax rate to 15 percent from 35 percent, a Trump administration official said on Monday.
At 10:54 a.m. ET (1454 GMT), the Dow Jones Industrial Average was up 222.74 points, or 1.07 percent, at 20,986.63, the S&P 500 was up 12.79 points, or 0.54 percent, at 2,386.94 and the Nasdaq Composite was up 29.65 points, or 0.5 percent, at 6,013.47.Better-than-expected profits at McDonald's and Caterpillar helped the Dow outperform other major Wall Street indexes.
Gains on the S&P were broad-based. Ten of its 11 major sectors were higher. DuPont's 3 percent increase, following a profit beat, helped the materials sector notch the most gains. Biogen's shares jumped more than 4 percent after the biotech company reported better-than-expected quarterly profit and revenue on Tuesday. Advancing issues outnumbered decliners on the NYSE by 1,990 to 791. On the Nasdaq, 1,939 issues rose and 724 fell.The S&P 500 index showed 77 52-week highs and three lows, while the Nasdaq recorded 164 highs and 26 lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)
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Updated Date: Apr 25, 2017 21:51 PM