Wall Street extends run of record highs; services data upbeat

Rajalakshmi S Updated - January 08, 2018 at 06:55 PM.

US stocks had edged up to extend their run of record closing highs on Wednesday as data on the services sector added to signs of strength in the economy and prospects for earnings.

It was the third straight session where all three major indexes hit record closing highs, though the small-cap Russell 2000 broke its string of eight all-time high finishes, ending down 0.3 per cent.

Shares of

Netflix helped lift the S&P 500, rising 2.9 per cent, after UBS raised its price target on the company. Shares of
Amazon , up 0.9 per cent, gave the index its biggest boost.

Market gains were limited as a decline in oil prices weighed on energy shares, and the S&P information technology index, up about 26 per cent this year, posted its first drop in seven sessions. The S&P energy index was down 0.1 per cent and the technology index was down 0.2 per cent.

Services sector expansion

The vast US services sector overcame hurricane-related snags to expand at its fastest pace in 12 years.

“It's been an overall quiet market, and I think it's waiting for the earnings season and maybe some bigger economic data," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“We've seen economic data, especially manufacturing data both here in the United States as well as globally, better, so it should be a better earnings season.”

Analysts expect third-quarters earnings of S&P 500 companies rose 5.5 per cent in the third quarter from a year earlier, according to Thomson Reuters data. That would be down from double-digit growth in the first two quarters, but many strategists are optimistic results will be better than expected.

The Dow Jones Industrial Average rose 19.97 points or 0.09 per cent to end at 22,661.64, the S&P 500 gained 3.16 points or 0.12 per cent to 2,537.74 and the Nasdaq Composite added 2.91 points or 0.04 per cent to 6,534.63.

US manufacturing data

Stocks have been hitting record highs on stronger economic data and President Donald Trump's tax overhaul plan. On Monday, data showed a measure of US manufacturing activity surged to a near 13-1/2-year high in September.

The rest of the week is loaded with economic data, culminating in Friday's non-farm payrolls report for September.

Tillerson denies resignation reports

Allaying fears of fresh turmoil in the Trump administration, US Secretary of State Rex Tillerson denied reports he considered resigning.

Investors had worried that another administration departure could weigh on Trump's efforts to push through the tax reform programme, a key 2016 campaign promise.

Health and Human Services Secretary Tom Price resigned on September 29 following an uproar over his use of costly private charter planes for government business.

Shares of Mylan surged 16.2 per cent and was the biggest percentage gainer in the S&P 500 after US regulators approved its copycat version of Teva's blockbuster multiple sclerosis drug. Teva Pharmaceutical slumped 14.6 per cent. The S&P healthcare index was up 0.5 per cent.

Wells Fargo was down 1.1 percent after the bank said it would refund some mortgage rate lock extension fees.

Declining issues outnumbered advancing ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favoured decliners. About 5.8 billion shares changed hands on US exchanges. That compares with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Published on October 5, 2017 03:59