S&P 500 hits record: why?

Earnings season

Investors will get a further chance to assess the economy when companies start releasing financial results in July. Earnings for S&P 500 companies probably grew 5.2 percent during the second quarter while sales rose 3.2 percent, analyst estimates compiled by Bloomberg show. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.

“It’s a great environment,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania, said in a phone interview. The firm oversees $7.4 billion. “You have a slowly broadening recovery. You have the Fed that’s going to remain accommodative. We’re soon to embark on the earnings season and we’re optimistic about that.”

Trading in S&P stocks was 11 percent above the 30-day average during this time of the day. The Chicago Board Options Exchange Volatility Index declined 3.9 percent to 11.12. The gauge, known as the VIX, is near its lowest level since February 2007.

Technology rally

All 10 industry groups in the S&P 500 advanced except for utilities, with technology, health-care and consumer- discretionary stocks climbing at least 0.9 percent. IBM, a computer-services provider, gained 2.7 percent to $186.07 for the biggest increase in the Dow.

GM rose 2.7 percent to $37.28. The automaker reported a gain of 1 percent in June auto sales, beating the average analyst estimate for a 6.3 percent decline last month.

Aided by available credit and an improving economy with housing starts that remained near the 1 million mark in May, U.S. auto sales adjusting for seasonal trends may have accelerated to an annualized pace of 16.3 million, the average of 14 analysts’ estimates compiled by Bloomberg. That’s the biggest year since 16.15 million vehicles were sold in 2007.

Netflix gained 6.1 percent to $467.29. Goldman Sachs boosted its recommendation on the Los Gatos, California-based company to buy from neutral, citing the potential for global subscription growth.

Twitter, GoPro

Twitter Inc. (NYSE:TWTR) rose 4.2 percent to $42.68 after naming former Goldman Sachs banker Anthony Noto its new chief financial officer. Noto, who led the social-media company’s initial public offering last year, replaces Mike Gupta, who will assume the role of senior vice president of strategic investments.

GoPro Inc. jumped 19 percent to $48.22 amid optimism that revenue tied to users’ shared videos will fuel profit growth. GoPro’s first-person-viewpoint cameras, which let surfers, sky divers and bungee jumpers document their exploits, have attracted a younger generation driven by selfies and sharing adventures on social media. The shares have doubled since their market debut last week.

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) rallied 6.7 percent to $301.36. Sanofi, a French drug company, plans to increase its stake in the American maker of the eye drug Eylea to 22.5 percent from 20.5 percent.

Urban Outfitters slipped 1.9 percent to $33.21. The apparel retailer was cut to neutral from outperform by Wedbush.

Exelon Corp. (NYSE:EXC), a utility company, fell the most in the S&P 500, erasing 2.2 percent to $35.67.

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