Wednesday, 10 May 2017

S&P, Nasdaq hit record highs as volatility drops

The S&P 500 and the Nasdaq hit record intraday highs for the second day in a row on Tuesday as market volatility dropped to a decade low following Emmanuel Macron's victory in the French presidential election and strong U.S. corporate earnings.

The VIX .VIX, Wall Street's "fear gauge", hit 9.57 points, the lowest since late 2006, a day after closing at its lowest level in over two decades. A falling VIX typically indicates a bullish outlook for stocks.

The 10-year U.S. Treasury yield rose to its highest in a month, while gold prices fell, indicating a shift in investor preference for riskier assets.

At 9:34 a.m. ET, the Dow Jones Industrial Average .DJI was up 21.5 points, or 0.1 percent, at 21,033.78.

The S&P 500 .SPX was up 2.57 points, or 0.11 percent, at 2,401.95, slightly below its all-time high of 2,402.42.

The Nasdaq Composite .IXIC was up 11.72 points, or 0.19 percent, at 6,114.38, after hitting an all-time high of 6,116.47.

Five of the 11 major S&P sectors were higher, while the typically defensive plays such as utilities and telecom services fell.

Since Donald Trump's election in November the S&P 500 has risen nearly 14 percent, raising questions about market valuations. However, solid first-quarter earnings could allay some of those fears.

S&P 500 earnings on average have grown 14.4 percent, up from 10.1 percent estimated at the start of the earnings season, according to Thomson Reuters

Shares of Valeant Pharmaceuticals jumped more than 16 percent after the company posted its first profit in six quarters.

Endo International, Office Depot and Marriott  also rose after reporting better-than-expected quarterly earnings.

Advancing issues outnumbered decliners on the NYSE by 1,447 to 1,013. On the Nasdaq, 1,279 issues rose and 868 fell.

The S&P 500 index showed 19 52-week highs and no lows, while the Nasdaq recorded 37 highs and 11 lows.

Reference: Yashaswini Swamynathan

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