S&P 500, the Nasdaq hits record highs on megacaps and earnings strength

July 23 (Reuters) – The S&P 500 and Nasdaq indexes hit record highs on Friday and were close to ending the week with gains, helped by mega-cap growth stocks and strong profits from social media companies, while Intel’s weak forecast has hit chipmakers.

Twitter Inc (TWTR.N) gained 4.2% after reporting quarterly revenue growth, while owner of Snapchat Snap Inc (SNAP.N) jumped 22.5% to beat growth estimates for users and revenue. Read more

Strong results from social media companies set a positive precedent for Facebook Inc (FB.O), which jumped 6.7%.

Other growing companies including Amazon.com (AMZN.O), Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), owner of Google, beat their quarterly results next week.

Technology (.SPLRCT) and Communications Services (.SPLRCL), which are home to some of these big tech heavyweights, added 0.9% and 2.5% respectively and were among the top earning S&P sectors.

The major indices were set for their fourth weekly gain in five weeks on positive earnings reports, while the Nasdaq 100 Index (.NDX) broke above 15,000 points for the first time.

“The technological benefits will be phenomenal… I’m not sure they will be the market leaders, they will be the earnings leaders,” said George Ball, president of Sanders Morris Harris in Houston, Texas.

“The key is what happens next. You’re going to compare yourself to a higher base than before and in the third and fourth quarters, we’ll be looking back to a largely post-COVID income level, and so the increases won’t be. also big.”

American Express Co (AXP.N) gained 2.6% and was the main driver of the S&P 500 (.SPSY) financial sector after its second quarter profits beat expectations. Read more

Intel Corp (INTC.O) slipped 5.8%, leading the declines in the Philadelphia SE Semiconductor (.SOX) index, after giving annual sales forecasts that implied a weak year-end. Read more

The second quarter earnings season has progressed, with 120 S&P 500 companies releasing numbers so far. Of those, 88.3% exceeded consensus estimates, according to data from Refinitiv.

Wall Street investors switched from growth stocks to economically sensitive value stocks this week, after concerns over the spread of the Delta coronavirus variant disrupted markets and sparked a flight to the perceived safety of the bond markets on Monday.

Meanwhile, data from IHS Markit showed business activity grew at a moderate pace for a second consecutive month in July amid supply constraints. Read more

The Federal Reserve’s policy meeting next week will be closely watched for further clues to the reduction amid a spike in COVID-19 cases, although President Jerome Powell has repeatedly said that the work fell well short of its target. Read more

At 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 176.87 points, or 0.51%, to 35,000.22, the S&P 500 (.SPX) was up 33.53 points, or 0.77%, to 4,401.01 and the Nasdaq Composite (.IXIC) is up 117.09 points, or 0.80%, to 14,801.69 points.

Gaining issues outnumbered declines by a 1.26-to-1 ratio on the NYSE. The problems down outnumbered the advances for a 1.28-to-1 ratio on the Nasdaq.

The S&P Index recorded 73 new 52-week highs and no new lows, while the Nasdaq recorded 74 new highs and 119 new lows.

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; edited by Uttaresh.V and Maju Samuel

Our Standards: Thomson Reuters Trust Principles.