US STOCKS-Wall St adds to record rally on strong earnings

Published 27-07-2017, 08:47 pm
© Reuters.

* Facebook jumps after quarterly results beat expectations

* Twitter falls on weaker-than-expected user growth

* Verizon up after posting subscriber growth

* Amazon, Intel, Starbucks to report results after the bell

* Indexes up: Dow 0.32 pct, S&P 0.19 pct, Nasdaq 0.55 pct (Adds details, changes comment, updates prices)

By Tanya Agrawal

July 27 (Reuters) - Wall Street continued its record run on Thursday, powered by a barrage of strong quarterly earnings, particularly from Facebook and Verizon.

Facebook FB.O jumped 5.49 percent, lifting both the S&P 500 and the Nasdaq Composite indexes, after the social network's results topped Wall Street estimates. VZ.N surged 6.37 percent after the company reported quarterly subscriber additions that topped estimates. The stock was the second-biggest gainer on both the S&P and the Dow, and put the S&P telecommunications index on track to post its biggest one-day percentage gain in nearly six years.

Earnings of S&P 500 companies are now expected to have climbed 9.9 percent in the second quarter, up from an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.

With equity markets at record levels, investors have been counting on strong earnings to justify the relatively expensive stock valuations.

"While multiples are not cheap and are expected to grow further, strong earnings are justifying these levels," said Aaron Clark, portfolio manager at GW&K Investment Management.

"The dollar, which was a headwind earlier, is now looking like a tailwind. Interest rates are low and earnings are strong. Right now, the path of least resistance is higher."

The Federal Reserve left interest rates unchanged on Wednesday and noted that both overall inflation and a measure of underlying price gains had declined. statement was perceived as dovish by investors, with rate futures pricing in a 38 percent chance of an interest rate hike by December, compared with a little over 50 percent chance priced in before the meeting.

That sent the dollar index .DXY to a 13-month low against a basket of major currencies. A weaker dollar help companies that have overseas operations.

At 10:47 a.m. ET (1447 GMT), the Dow Jones Industrial Average .DJI was up 69.93 points, or 0.32 percent, at 21,780.94 and the S&P 500 .SPX was up 4.85 points, or 0.19 percent, at 2,482.68.

The Nasdaq Composite .IXIC was up 35.53 points, or 0.55 percent, at 6,458.28.

Five of the 11 major S&P sectors were higher, with the telecommunication index's .SPLRCL 3.89 percent rise leading the advancers.

However, losses in Amgen AMGN.O , Johnson and Johnson JNJ.N and Celgene CELG.O led to a 0.34 percent drop in the healthcare sector .SPXHC .

Twitter TWTR.N was down 11.98 percent after the company's quarterly results showed it failed to add users on a monthly basis in the second quarter, compared with the first quarter. Parcel Service UPS.N fell 2.73 percent, despite the U.S. package service posting a better-than-expected quarterly profit. AMZN.O , Intel INTC.O , Starbucks SBUX.O and Mattel MAT.O are among those reporting results after the bell.

Advancing issues outnumbered decliners on the NYSE by 1,391 to 1,300. On the Nasdaq, 1,415 issues rose and 1,217 fell.

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