Upbeat Earnings Push Wall St To New Highs

Fredrick Soto
April 27, 2019

The Shanghai Composite index edged 0.1% higher to 3,201.61 and the Kospi in South Korea gave up 0.9% to 2,201.03.

Australian shares rose to a more than 11-year high on Wednesday after data showed inflation slowed sharply last quarter, boosting expectations of a rate cut this year.

But, with big companies such as Microsoft Corp and Facebook Inc, reporting after the close on Wednesday and Amazon.com and Intel Corp reports on tap for Thursday afternoon, many investors kept to the sidelines.

The Australian dollar has continued to slip and was worth US70.99¢ at 5am from US71.19¢ on Tuesday.

In economic news, the Bureau of Statistics will release its consumer price index (CPI) for the first quarter.

Global equity markets rallied on Tuesday, with the Nasdaq and S&P 500 indexes setting record closing highs on Wall Street, while European energy shares posted their biggest daily gain since January as crude prices surged. It's previous record high was 2,930.75, which was set on September 20. This could keep stocks from gaining significantly more in the short-term, said Lynch. It has risen about 17 percent so far this year, with help from a dovish Federal Reserve and hopes of a US-China trade resolution as well as an upbeat start to the first-quarter earnings season.

So much for the weak earnings blast this quarter and those fears that the Fed's rate rises had slowed the economy to stall speed - if Wall Street's record double closing on Tuesday is any guide, the chances have risen that the United States central bank will start to become anxious about the economy rebounding.

"The overall picture confirms the economy is on a steady footing".

At 2:48 p.m. ET, the Dow Jones Industrial Average rose 136.16 points, or 0.51 per cent, to 26,647.21, the S&P 500 gained 26.69 points, or 0.92 per cent, to 2,934.66 and the Nasdaq Composite added 109.64 points, or 1.37 per cent, to 8,124.91.

So far, nearly 130 S&P 500 companies have reported first quarter earnings, and 78% of them beat expectations, according to data from Refinitiv.

While expectations for first-quarter EPS have improved over the past three weeks, forecasts for full 2019 EPS growth have become less optimistic, now at 3.0% growth, down from 3.3% at the start of the month.

Twitter Inc shares soared 16 per cent, hovering near a nine-month high, after the social media company posted better-than-expected quarterly revenue and a surprise rise in monthly active users.

Hasbro surged 14.2% after the toy company reported strong growth in its various franchises, which include Transformers toys, which benefited from the hit movie "Bumblebee" and "Magic: The Gathering Arena". Texas Instruments rose 2% after its quarterly report.

The energy sector decreased 2.3 per cent as oil prices fell following a weekly report pointing to US crude inventories growing 5.5 million barrels last week, far exceeding analyst forecasts. Shares rose 5.7 per cent. The Nasdaq added 105 points, or 1.3%, to 8,120.

On U.S. exchanges 6.57 billion shares changed hands compared with the 6.65 billion-share average for the last 20 sessions.

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