Tech shares, signs of solid U.S. economic growth put Nasdaq, S&P 500 at records
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 28, 2017).
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-- U.S. tech shares rise after earnings
-- Euro falls further
-- Spanish stocks rocked by political turmoil
A busy week of robust corporate earnings lifted the S&P 500 and Nasdaq Composite to fresh highs.
More than half of companies in the S&P 500 had reported third-quarter results as of Friday, and more than three-quarters of those results have surpassed analysts' expectations, according to FactSet. Standout corporate results, which ranged from machinery maker Caterpillar to technology stalwart Microsoft, drove broader stock-market gains.
Among the best performers during the week were Google parent Alphabet and Amazon.com, both of which reported strong revenue. Earlier in the week, Twitter's shares jumped after the social-media company said it added more new monthly users than analysts expected and boosted its guidance for the fourth quarter. On Friday, shares of Intel climbed $3.05, or 7.4%, to $44.40, after the company lifted its guidance.
The strong tech gains propelled the Nasdaq Composite up 144.49, or 2.2%, to 6701.26, and the S&P 500 up 20.67, or 0.8%, to 2581.07, on Friday.
The Nasdaq hit its 61st high of 2017, a tie for the most records in a year since 1999.
The gains in tech companies helped offset a drop by Mattel shares, which fell 1.37, or 8.9%, to 14, and a decline in Expedia shares, which tumbled 23.56, or 16%, to 123.79, following their quarterly reports.
The Dow Jones Industrial Average gained 33.33, or 0.1%, to 23434.19.
Though some analysts say they worry about the big run for tech stocks, which have soared in recent months, others say these strong earnings reports support the high stock prices.
"Valuations across the board may be frothy, but I think there are plenty of companies who can justify their valuations," said Jon Mackay, investment strategist at Schroders. The tech sector is large, and there are plenty of high-performing hardware companies as well as those known for their innovative products, he added.
Also lifting stocks Friday was another sign of strong U.S. economic growth. Gross domestic product, the broadest measure of goods and services made in the U.S., expanded at a 3% annual rate in the third quarter, the Commerce Department said, above economists' estimates.
The growth came during a three-month period in which the country faced hurricanes that temporarily shut down major population centers.
The upbeat tone in global markets also came after the European Central Bank on Thursday extended its bond-buying program but at a reduced level, confirming market participants' expectations that the central bank would only slowly ease off crisis-era stimulus policies.
The decision weighed down the euro but boosted German government bonds and eurozone stocks, which have been supported by the bank's expansive stance for several years.
Spain's IBEX 35 index fell 1.5% as Catalonia's Parliament declared the region an independent republic on Friday. The declaration escalates a standoff with Madrid, as lawmakers there agreed to grant Spain's prime minister the power to impose direct rule on the region.
More broadly, however, European stocks advanced as the euro fell, as a 10% gain in the common currency against the dollar this year has dragged down earnings of companies that translate revenue from overseas.
The Stoxx Europe 600 gained 0.6%, a day after its biggest daily rise since July.
Earlier, Asian markets rose following Thursday's gains in Europe and the U.S. and the upbeat results from the U.S. tech sector.
Hong Kong's Hang Seng Index rose 0.8% and South Korea's Kospi gained 0.6%. Japan's Nikkei Stock Average climbed 1.2% to a two-decade high, helped by a decline in the yen during Asian trading as global risk appetite improved.
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(END) Dow Jones Newswires
October 28, 2017 02:47 ET (06:47 GMT)