S&P, Dow Hit Records on Upbeat Intel, AbbVie Earnings

(Reuters) —
stocks, markets, wall street
Traders work on the floor of the New York Stock Exchange Friday. (Reuters/Brendan McDermid)

U.S. stocks rose to fresh records on Friday, propelled by strong earnings from Intel and drugmaker AbbVie as well as a weaker dollar, putting the three main indexes on track for their best four-week rally since 2016.

Intel’s shares jumped more than 9 percent to their highest in almost two decades, after strong results offered the clearest sign yet that its years-long effort to shift away from a slowing PC business was paying off.

AbbVie rose 8.9 percent after reporting upbeat profit on strong sales for its blockbuster drug Humira.

The earnings helped investors looked beyond data that showed that U.S. economic growth unexpectedly slowed in the fourth quarter.

Gross domestic product increased at a 2.6-percent annual rate in the fourth quarter, the Commerce Department said in its advance GDP report. Economists polled by Reuters had forecast the economy to expand at a 3 percent rate.

Another set of data showed that new orders for key U.S.-made capital goods unexpectedly fell in December.

“I was surprised at the headline numbers,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. “But when you look at details, GDP growth is much stronger than what the headline number suggests.”

Markets have moved this week on comments from top U.S. officials at the World Economic Forum in Davos.

U.S. Treasury Secretary Steven Mnuchin’s endorsement of a weak dollar triggered a slide in the currency that helped prop up the indexes. The greenback clawed back some of the losses after President Donald Trump said he ultimately wants the dollar to be strong.

The dollar was last down 0.44 percent against a basket of currencies.

Trump, in his address at Davos, warned trading partners that Washington would no longer tolerate unfair trade, but added that the United States was “open for business.”

The Dow Jones Industrial Average gained 86.9 points, or 0.33 percent, to 26,479.69, and the S&P 500 rose 14.61 points, or 0.51 percent, to 2,853.86. The Nasdaq Composite was up 47.80 points, or 0.64 percent, at 7,458.96.

Of the 133 S&P 500 companies that have reported quarterly earnings so far, 79.7 percent have topped expectations, versus an average of 72 percent over the previous four quarters.

Pfizer and Gilead Sciences also rose, pulling higher the S&P health-care index by 1.14 percent, the biggest gainer among the 11 major S&P sectors.

Honeywell rose 1.2 percent after the company raised its forecast for 2018 profit.

Starbucks fell about 5 percent after it warned that 2018 global cafe sales growth would be at the low end of its forecast.

Declining issues outnumbered advancers on the NYSE by 1,449 to 1,301. On the Nasdaq, 1,454 issues rose and 1,312 fell.

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