3M, Caterpillar earnings boost Dow to another record close

Marcus Newton
January 27, 2018

Intel's shares surged as high as $49.95, the highest level since October 2000, and were last up 9.81 percent after results indicated that the chipmaker's shift to higher-margin data-center business was working. A stronger dollar can create a headwind for multinational companies doing business overseas but a firmer greenback also has been viewed as underlining a strong US economy.

S&P 500 companies on average are expected to have increased their fourth-quarter earnings by 12.7 percent, according to Thomson Reuters I/B/E/S.

In the energy market, oil prices settled higher, with crude also posting a weekly gain as the weaker dollar underpinned prices.

The earnings enabled investors to shrug off a reading on economic growth that came in below expectations.

"You have manufacturing and the consumer doing well at the same time and the globe is doing better, so that's a path for future GDP gains, which has always provided a fertile backdrop for earnings gains", said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management in Milwaukee.

This happens to be the best and strongest work of 2018 so far in the stock market. A weaker dollar tends to benefit large USA multinational companies.

The Dow Jones industrial average added 171 points, or 0.7 percent, to 26,422.

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The U.S. currency regained losses against a basket of major currencies after Trump told CNBC in an interview in Davos, Switzerland that he wants to see a strong dollar.

Pfizer (N:) and Gilead Sciences (O:) also rose, pulling higher the S&P healthcare index by 1.14 percent, the biggest gainer among the 11 major S&P sectors.

Of the S&P 500 companies that have already posted results, 78.8 percent have topped expectations, versus an average of 72 percent over the previous four quarters.

The Nasdaq is up 74.79 points, or 1 percent. For the week, Brent posted a almost 2.7 percent gain, while USA crude was up 4.3 percent for the week.

Advancing issues outnumbered declining ones on the NYSE by a 1.20-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers. The Nasdaq gained 94 points, or 1.3 percent, to 7,505.

"It's non-stop positive reinforcement that keeps pushing the market up", said Frank Davis, director of sales and trading at LEK Securities in NY.

Other reports by MaliBehiribAe

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