Strong company earnings drive stocks to new highs

The Wall Street entrance of the New York Stock Exchange.
The Wall Street entrance of the New York Stock Exchange.
(Richard Drew / Associated Press)

Strong company earnings put investors in a buying mood Thursday, lifting the major U.S. stock indexes to record highs.

Banks and other financial companies led the rally as bond yields rose. Energy also notched big gains as crude oil prices rose. Utilities and materials lagged behind the broader market.

Traders have been focused in recent weeks on companies reporting their quarterly results as they size up corporate America’s prospects for growth. They’re also keeping an eye on Washington to gauge whether the Trump administration will deliver on expectations of business-friendly policies that helped drive a market rally last fall.

“You’re definitely seeing a kind of risk-on [trade] right now, with the fear of missing out overshadowing the fear of a policy mistake,” said Chris Zaccarelli, chief investment officer for Cornerstone Financial. “You’re seeing a recovery in corporate profits, and that’s definitely giving investors some extra confidence.”


The Dow Jones industrial average rose 118.06 points, or 0.6%, to 20,172.40. The Standard & Poor’s 500 index gained 13.20 points, or 0.6%, to 2,307.87. The Nasdaq composite index advanced 32.73 points, or 0.6%, to 5,715.18. The Nasdaq has now set a record high three times this week, in addition to last Friday.

The Russell 2000 index of small-company stocks outpaced the rest of the market. It climbed 19.79 points, or 1.5%, to 1,378.53.

About 61% of the companies in the S&P 500 had reported earnings as of Wednesday. Going by those results, company earnings in the October-through-December quarter are up 6.7% from a year earlier, according to S&P Global Market Intelligence.

“The earnings season is turning out to be pretty good,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management. “We’re starting to see some real earnings growth.”

Investors bid up shares in companies that turned in better earnings or outlooks than Wall Street was expecting, including Gannett, Kellogg and Dunkin’ Brands.

Gannett, publisher of USA Today and other newspapers, advanced 4% to $9.05. Kellogg rose 4% to $76.44. Dunkin’ Brands climbed 4.2% to $54.13.Traders also welcomed Viacom’s latest quarterly results and the media giant’s plans to turn its business around. The owner of BET, Comedy Central, MTV, Nickelodeon and the Paramount film studio rose 4.3% to $43.89.

Read more: Viacom’s new CEO unveils his new strategy as earnings fall »

Yum Brands got a lift thanks to stronger U.S. sales at its KFC and Taco Bell chains, which offset weakness at the company’s Pizza Hut restaurants. Its shares went up 1.2% to $67.39.


Results from several companies failed to impress investors.Twitter slumped 12.3% to $16.41 after the social media company’s latest quarterly earnings, which topped analyst expectations, were overshadowed by a weak profit forecast.

Read more: Twitter shares dive as even Trump’s tweets fail to provoke solid user growth »

Coca-Cola traded sank 1.8% to $41.25 after it reported that its profit fell 55% in the most recent quarter.

Dun & Bradstreet tumbled 16.8% to $101.88 after the business information provider said it expects less revenue from a partnership with Salesforce this year. The stock was the biggest loser in the S&P 500.


Benchmark U.S. crude rose 66 cents, or 1.3%, to $53 a barrel. Brent crude, the benchmark for international oil prices, rose 51 cents, or about 1%, to $55.63 a barrel.

Wholesale gasoline advanced 2 cents to $1.57 a gallon. Heating oil rose 1 cent to $1.64 a gallon. Natural gas futures rose 2 cents to $3.14 per 1,000 cubic feet.

The dollar rose to 113.33 yen from 112.05 yen. The euro fell to $1.0658 from $1.0687.

Bond prices fell. The 10-year Treasury yield rose to 2.39% from 2.34%.


Gold fell $2.70 to $1,236.80 an ounce. Silver rose 4 cents to $17.74 an ounce. Copper slid 1 cent to $2.65 a pound.

The major stock indexes in Europe also notched gains Thursday. Germany’s DAX rose 0.9%, France’s CAC 40 gained 1.3% and Britain’s FTSE 100 advanced 0.6%.

In Asia, Japan’s Nikkei 225 stock index slid 0.5% ahead of meetings Friday between Prime Minister Shinzo Abe and President Trump. Most other regional benchmarks notched gains. Hong Kong’s Hang Seng index gained 0.2%, while the Kospi in South Korea was almost flat. Australia’s S&P ASX/200 rose 0.2%.



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3 p.m.: This article was updated with closing prices, analyst comment and context.

This article was originally published at 8:55 a.m.