US Stocks Poised for New Record Highs -- 3rd Update

By Georgi Kantchev Features Dow Jones Newswires

U.S. stocks were poised to inch past record levels Thursday after the Federal Reserve damped expectations for interest-rate increases and investors focused on upbeat earnings reports.

Continue Reading Below

Futures indicated the S&P 500 would add 0.2% at the opening bell.

The Stoxx Europe 600 was broadly flat after fluctuating amid a flurry of earnings reports. That followed gains in indexes across Asia.

U.S. stock indexes climbed to fresh records Wednesday after investors found a dovish tilt in the Fed's latest statement and corporate earnings continued to beat Wall Street expectations.

Of the more than one-third of S&P 500 companies that had reported results through Wednesday, 78% beat earnings estimates, according to Thomson Reuters.

"Earnings are coming in above expectations, which is justifying the move up in equities," said Jeff Zipper, managing director at the Private Client Reserve of U.S. Bank, which has $145 billion under management. "At the same time, the weaker dollar is good for multinationals' bottom lines."

Continue Reading Below

On Thursday, Royal Dutch Shell PLC kicked off big oil's second-quarter earnings season with a strong showing, reporting a sharp increase in cash flow from operating activities to $11.3 billion. Shell's shares gained 1.1%.

In South Korea, Samsung Electronics Co. delivered its biggest-ever quarter of profit.

Deutsche Bank AG beat analysts' expectations in the second quarter, but revenue fell on the year in all three divisions of the German lender. Deutsche Bank shares were down 3.7%.

At the Fed, officials voted unanimously to leave rates unchanged and signaled that the central bank could start shrinking its balance sheet "relatively soon." But tweaks in the Fed's statement indicated that policy makers had grown more concerned about a recent slowdown in inflation.

"As long as the next Fed moves are well telegraphed, it shouldn't present a curveball for the market," Mr. Zipper said. "So far, that seems to be the case."

Investors see a roughly 47% chance of a rate rise by the end of 2017, according to Fed-fund futures tracked by CME Group.

The Wall Street Journal Dollar Index, which tracks the greenback against a basket of 16 currencies, was up 0.1%. The British pound hit its highest level since September against the dollar, rising 0.2% to $1.314.

Yields on 10-year Treasurys rose to 2.294% on Thursday from 2.285% the previous day, while German bund yields fell to 0.525%. Yields move inversely to prices.

In Asia, the Nikkei Stock Average gained 0.2% while Hong Kong's Hang Seng Index was up 0.8% at a 2-year high.

In commodities, oil prices were down, with Brent crude, the international benchmark, falling 0.5% to $50.85 a barrel. Gold was up 1.1%.

Ese Erheriene contributed to this article.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

July 27, 2017 08:12 ET (12:12 GMT)