Stocks closed at a new all time high on Tuesday as better-than-expected quarterly profits from some of the largest companies encouraged investors.
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The benchmark S&P 500 index is up 17%, its best start to a year since 1987, while the Nasdaq has gained 22%, its best start since 1991. The Dow Jones Industrial Average remains about half a percentage point from its record last October.
Tuesday’s move to a record high for the benchmark S&P 500 index and the Nasdaq index comes less than six months after a sharp decline in late December, which led the S&P 500 to its worst annual performance since 2008 But stocks quickly recovered in the past three months as the Federal Reserve stopped raising interest rates and the Trump administration said it was making progress on a trade deal with China.
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|I:COMP||NASDAQ COMPOSITE INDEX||8013.272214||+100.03||+1.26%|
Coca-Cola, United Technologies, Lockheed Martin, and Procter & Gamble all reported better-than-expected quarterly earnings on Tuesday.
Twitter shares jumped on its stronger-than-expected results and the social media company said its monthly active users totalled 330 million.
Verizon shares fell even though the telecoms giant beat expectations and raised its outlook.
This is the busiest week of the U.S. corporate earnings season with more than 140 S&P 500 index companies publishing first-quarter results. So far more than 78% of the S&P 500 companies that have reported have surpassed analyst expectations, according to FactSet data.
However, the rally this year has been despite outflows from equity funds, according to Bank of America data, suggesting some of the gains have been driven by corporate buybacks of stocks.
Amazon, Facebook, Microsoft and Tesla are also due to report earnings this week.
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Investors will watch first quarter U.S. GDP data due Friday to see if forecasts for slowing economic growth are fulfilled.
New-home sales in March ran at a seasonally adjusted annual rate of 692,000 or an increase of 4.5 percent, the Commerce Department said Tuesday. March’s sales were the best since November 2017. For the year to date, sales are running just 1.7 percent stronger than the same period last year. The median price of a home sold in March fell though to $302,700, 7.5 percent lower than the same period a year ago.
Investors are also concerned about rising oil prices which hit the highest levels this year the U.S. announced a further clampdown on Iran’s oil exports just ahead of the summer driving season.
International benchmark Brent crude closed at $74.51 a barrel, while U.S. benchmark West Texas Intermediate crude for June delivery settled at $66.30 a barrel.