S&P 500, Dow Hit Fresh Records for Second Day on Earnings, Hormuz Reopening Hopes
Summary
- The S&P 500 and the Dow Jones Industrial Average hit record highs for a second straight day, supported by hopes for the reopening of the Strait of Hormuz and strong corporate earnings.
- The Dow drew support from solid earnings reports from Disney and Eli Lilly, while semiconductor stocks were mixed, with Nvidia rising more than 4% and AMD falling 5%.
- Despite falling oil prices, a weaker dollar index, a jump in gold prices, and an 11% plunge in SpaceX shares, 90% of U.S. companies reporting earnings have delivered results above estimates, helping sustain the market's advance.
Forecast Trend Report by Period
Strong earnings and hopes for the reopening of the Strait of Hormuz lift stocks
Nvidia jumps more than 4%, while AMD slides
The S&P 500 rose to a record high on August 5, extending its winning streak to a fifth straight session as strong corporate earnings combined with expectations that the Strait of Hormuz could reopen soon.
As of 10:15 a.m. in New York, the S&P 500 was up 0.57% above 7,782, setting a second straight intraday record. The Dow Jones Industrial Average gained 1.1%, also reaching a record high for a second consecutive day. The Nasdaq Composite added 0.4%.
Over the past week, the S&P 500 has climbed more than 6%, while the Dow and the Nasdaq have advanced more than 5% and 9%, respectively.
The Dow drew support from Walt Disney Co., which rose more than 2% after reporting better-than-expected fiscal third-quarter results. Eli Lilly & Co. jumped 7% after raising its full-year sales and profit outlook on surging obesity-drug sales.
Oil prices extended their decline. West Texas Intermediate crude for September delivery fell more than 1% to $74.8 a barrel, while Brent crude for October delivery, the international benchmark, dropped 0.8% to about $78 a barrel.
As oil weakened, the yield on the 10-year Treasury was little changed at 4.621%. The two-year yield rose 1 basis point to 4.206%.
The ICE Dollar Index slipped 0.1% to 99.746. Spot gold climbed 2.9% to $4,194.38 an ounce.
Advanced Micro Devices Inc. fell 5% after reporting earnings after the close a day earlier, despite posting adjusted earnings per share that beat analyst estimates.
Semiconductor shares were mixed. Nvidia rose more than 4% and Micron Technology Inc. gained 1% after the Vera Rubin chip was highlighted in SpaceX's earnings release. Intel Corp. and SK Hynix Inc. were little changed.
SpaceX shares plunged 11% after the company reported that capital spending tied to artificial intelligence had increased sixfold and ahead of a lockup expiration set to begin on August 6.
SanDisk and Western Digital are due to report earnings after the close.
According to Bloomberg, 90% of U.S. companies that have reported results so far have beaten estimates.
"Earnings are still serving as the compass, the economy continues to show resilience, market participation has broadened, and much of the excessive valuation has been worked off," Keith Lerner of Truist Advisory Services said.
Kim Jung-a, guest reporter at Hankyung.com, kja@hankyung.com
Korea Economic Daily
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