Solid profits and forecasts from several technology companies helped lift the Standard & Poor’s 500 index to a modest gain Thursday, leaving it within striking distance of its all-time high.
The benchmark index wavered between small gains and losses much of the day as investors reviewed a round of third-quarter earnings reports and company outlooks.
Traders have braced for weaker results this earnings season amid concerns about the costly U.S.-China trade war and increased signs of slowing economic growth worldwide.
Earnings reports in the last couple of weeks have mostly topped Wall Street analysts’ modest expectations. However, many of the companies that delivered improved results for the quarter also issued disappointing profit outlooks. That has led to several days of uneven trading in the markets.
“What we would have needed to see for the market to be really cheering this [earnings] story is if companies were beating and then raising forward expectations,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. ”But you’re not seeing that very consistently.”
The S&P 500 ended the day with a gain of 5.77 points, or 0.2%, at 3,010.29 — within 0.6% of the all-time high it set in July.
The Dow Jones industrial average slipped 28.42 points, or 0.1%, to 26,805.53. The Nasdaq composite, which is heavily weighted with technology stocks, climbed 66 points, or 0.8%, to 8,185.80.
The Russell 2000 index of smaller-company stocks fell 2.67 points, or 0.2%, to 1,550.18.
Bond prices were little changed. The yield on the 10-year Treasury held at 1.76%.
About one-third of the companies in the S&P 500 have released their results for the July-through-September quarter. So far, they amount to just over a 1.2% drop in profit overall, according to FactSet. That’s much better than initial expectations for a more than 4% contraction in earnings growth for all the companies in the index.
Although that’s encouraging, company outlooks have been uneven.
“Financials looked OK, but the tech and industrials have been really mixed,” Haworth said. ”You had good news from Microsoft, bad news from Texas Instruments, and that’s what has everyone stuck.”
The tech sector, already the biggest gainer this year, almost single-handedly accounted for the market’s gains Thursday as solid results from Microsoft, PayPal and other tech companies offset disappointing quarterly report cards from other companies. Microsoft shares rose 2%, PayPal climbed 8.6% and semiconductor equipment maker Lam Research surged 13.9%.
Traders also cheered encouraging results from several retailers, including O’Reilly Automotive. O’Reilly stock jumped 9.2% after the auto parts seller delivered better-than-expected quarterly results and raised its profit forecast.
Tesla shares surged 17.7% after the electric car maker surprised Wall Street with a solid profit. Analysts expected the company to report another loss as it struggles to increase sales.
Solid profits helped boost American Airlines shares 4% and lift Southwest Airlines shares 5.7%. American Airlines beat Wall Street profit forecasts, thanks in part to lower prices for jet fuel. Southwest overcame the grounding of its Boeing 737 Max jets to beat analysts’ profit forecasts.
Other earnings reports and outlooks put investors in a selling mood. Twitter plunged 20.8% on weak financial results, pulling communications services stocks down.
Several companies’ stocks fell after they posted mixed results or weak profit outlooks: Ford slumped 6.6%, 3M lost 4.1%, EBay tumbled 9.1%, and Stanley Black & Decker dropped 4.7%.
Benchmark crude oil rose 26 cents to $56.23 a barrel. Brent crude oil, the international standard, gained 50 cents to $61.67 a barrel. Wholesale gasoline rose 1 cent to $1.66 a gallon. Heating oil climbed 2 cents to $1.98 a gallon. Natural gas rose 3 cents to $2.32 per 1,000 cubic feet.
Gold rose $9 to $1,498.90 an ounce. Silver rose 22 cents to $17.74 an ounce. Copper was unchanged at $2.66 a pound.