Market Update: Nasdaq Notches New Record as Trump Welcome’s E.U.’s Juncker to White House
U.S. stocks rose Wednesday, with the tech-focused Nasdaq hitting new highs as trade talks between President Donald Trump and European Commission counterpart Jean-Claude Juncker were underway in Washington.
All of Wall Street’s major indexes reported gains on Wednesday, with the Nasdaq surging 1.2% to 7,932.24, its best ever close.
The broader S&P 500 Index gained 0.9% to 2,845.09, its highest in six months. Ten of 11 primary sectors recorded gains, with information technology and industrials leading.
Dow industrials overcame a shaky open to finish sharply higher in midweek trade. The 30-company index climbed 172.16 points, or 0.7%, to close at 25,414.10.
The CBOE Volatility Index, a gauge used to monitor investor anxiety, held near six-month lows. The so-called “fear index” reached a session low of 11.80 on a scale of 1-100 where 20 represents the historic mean. It would later settle at 12.33, down slightly from the previous session.
Earnings in Focus
Dow blue-chip Coca-Cola Co (KO) on Wednesday reported second-quarter earnings and revenue that were higher than expected. The company posted adjusted per-share earnings of 61 cents on revenue of $8.9 billion. Despite beating estimates, sales slumped 8% year-over-year.
Meanwhile, General Motors Co (GM) slashed its profit outlook for the year, citing rising materials costs and volatile foreign exchange rates in South America. GM earned $1.81 per share in the previous quarter on revenue of $36.76 billion. Both were higher than expected.
For the year, GM expects to earn $6 per share, down from $6.30 previously.
Although corporate earnings results on Wednesday largely disappointed investors, Wall Street remains on track for one of its best quarters since 2010. A strong earnings quarter is helping to offset growing concerns about a potential trade war involving the U.S.’ closest allies.
About one-fifth of S&P 500 companies have reported Q2 earnings to date. Nine of ten (92%) have disclosed better than expected earnings and 77% have beaten sales estimates, according to Charles Schwab.
Underpinning Wall Street’s latest advance was the hope that world leaders would set their differences aside and embark on new trade agreements.
On Wednesday, President Trump welcomed Jean-Claude Juncker to the White House where the two sides discussed transatlantic trade. Although the European Union said it will not make any offers this week, observers believe that a temporary truce can be reached, thereby avoiding a tit-for-tat trade war.
Last week, President Trump said he was ready to implement tariffs on $500 billion in Chinese exports. That goes above and beyond the $50 billion in Chinese goods targeted in the first round of tariffs.
“I’m ready to go to 500,” Trump said Friday in a televised interview with CNBC.
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