Nasdaq tops 6,000 as strong earnings boost confidence

Gains led by tech heavyweight such as Apple and Microsoft

A view of the exterior of the Nasdaq market site in Times Square after the Nasdaq breached the 6,000 mark for the first time ever on Tuesday. Photo: Reuters

A view of the exterior of the Nasdaq market site in Times Square after the Nasdaq breached the 6,000 mark for the first time ever on Tuesday. Photo: Reuters

 

The Nasdaq crossed the 6,000 threshold for the first time on Tuesday, while the Dow registered triple-digit gains as strong earnings underscored the health of Corporate America.

The tech-heavy Nasdaq rose 0.7 per cent at just over 6025, having gone as high as 6035 earlier, to hit a record level, 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.In late trading, the Dow Jones Industrial Average was up over 1.1 per cent.

Investors are also keeping a close watch on the latest earnings season, hoping that companies will be able to justify their lofty valuations, which were 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. President 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 per cent from 35 percent, a Trump administration official said on Monday.

The Dow outperformed other major sectors, largely due to a surge in Caterpillar and McDonald’s after they reported better-than-expected profits. Eight of the S&P 500’s 11 major sectors were higher. DuPont’s 2.8 percent increase, following a profit beat, helped the materials sector top the list of gainers.

Biogen jumped nearly 4 percent after the biotech company reported better-than-expected quarterly profit and revenue on Tuesday.Advancing issues outnumbered decliners on the NYSE by 2,017 to 853.