U.S. stocks advanced, with the Standard & Poor’s 500 Index at an all-time high, as investors weighed earnings from Microsoft Corp. (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) to assess the strength of the economy.
The S&P 500 added 0.2 percent to an intraday record of 1,986.77 at 9:32 a.m. in New York. The Dow Jones Industrial Average slipped 7 points, or less than 0.1 percent, to 17,049.
The S&P 500 rose yesterday after inflation data signaled the Federal Reserve won’t be compelled to raise interest rates in the near future and earnings reports boosted optimism about the economy. Chair Janet Yellen has said rates will stay low for a “considerable time” after the central bank stops its monthly bond purchases. It is on track to end them in October.
Investors are also watching developments in Ukraine, where the Defense Ministry today said rebels in the eastern part of the country downed two government fighters.
The European Union yesterday threatened to restrict Russia’s access to capital markets and sensitive energy and defense technologies unless President Vladimir Putin expedites a probe into the downing of the Malaysia Airlines plane.
In the Middle East, Israeli Justice Minister Tzipi Livni said the nation doesn’t plan to stop its Gaza Strip offensive as long as the Palestinian territory’s Hamas rulers continue to pose a threat. U.S. Secretary of State John Kerry flew to Israel in pursuit of an elusive truce deal.
“Usually we have a lot lighter of volume in this time of year and negative geopolitical news would drive the market down more than it has, but the economy is better fundamentally than most people think it is,” Kurt Cambier, senior partner at Littleton, Colorado-based Centennial Capital Partners, said in a phone interview.
The S&P 500 advanced 7.3 percent this year through yesterday amid better-than-estimated corporate earnings and central bank stimulus, as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.
Thirty seven companies on the S&P 500 including PepsiCo Inc., Dow Chemical Co., Boeing Co. and Facebook Inc. will post earnings today. Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.
Of the members of the gauge that have reported results so far, 78 percent have exceeded analysts’ estimates for profit and 65 percent have beaten revenue projections, according to data compiled by Bloomberg.