By Noel Randewich
(Reuters) – Apple and other tech favorites propelled Wall Street to record highs on Monday, fueled by optimism about the signing of a preliminary U.S.-China trade deal, as well upcoming fourth-quarter earnings reports.
Google-owner Alphabet Inc
An easing of Middle East tensions and the Phase 1 U.S.-China trade agreement, which is expected to be signed in Washington on Wednesday, have encouraged riskier bets over the last week.
“People are optimistic about earnings and they’re also relieved that the Iran situation last week didn’t end up being worse than it was, and people are happy that China and the U.S. are coming together to sign the Phase 1 trade deal. There’s a lot to be optimistic about,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
Bloomberg, citing sources, reported that the Trump administration planned to lift its designation of China as a currency manipulator, adding to the positive mood.
Investors are awaiting earnings from big banks JPMorgan Chase & Co
Analysts expect profits at S&P 500 companies to drop 0.6% for a second consecutive quarter, according to Refinitiv IBES data.
Many investors, however, are already looking ahead to a potentially rosier earnings outlook once Washington and China resolve their trade dispute.
The S&P 500 and Nasdaq Composite were on track to close at record highs.
At 2:27 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 0.18% at 28,876.29, while the S&P 500 <.SPX> gained 0.55% to 3,283.24.
The Nasdaq Composite <.IXIC> added 0.89% to 9,260.62.
Aerospace companies Hexcel Corp
Advancing issues outnumbered declining ones on the NYSE by a 2.34-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.
The S&P 500 posted 59 new 52-week highs and 1 new low; the Nasdaq Composite recorded 136 new highs and 23 new lows.
(Reporting by Noel Randewich; additional reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Dan Grebler)