While you were sleeping: Wall Street hits record

Wednesday 23rd July 2014

Wall Street rose, pushing the S&P 500 Index to a record high, as investors opted to focus on better-than-expected earnings from companies including Comcast and Chipotle Mexican Grill as well as solid inflation and housing data.

Shares of Chipotle jumped, last up 12.2 percent, after the company posted quarterly profit that surpassed expectations and lifted its sales forecast. Chipotle said it opened 45 new restaurants during the quarter, bringing the total to 1,681.

In late afternoon trading in New York, the Dow Jones Industrial Average gained 0.45 percent, the Standard & Poor’s 500 index added 0.58 percent, while the Nasdaq Composite Index climbed 0.79 percent. Earlier in the session the S&P 500 climbed as a high as an intraday record 1,986.24. The index has gained 8.56 percent so far this year.

"The market is focusing on several good earnings reports and of course economic data," Peter Cardillo, chief market economist at Rockwell Global Capital in New York, told Reuters.

Gains in shares of IBM and those of Goldman Sachs, both up 1.9 percent, led the advance in the Dow.

Shares of Travelers and Coca-Cola bucked the trend, down 3.6 percent and 3.1 percent respectively, after both companies reported second-quarter earnings that failed to meet the mark.

“While I am pleased with our progress to date, we remain focused on the work required to return our business to the level of sustainable growth we and our shareowners expect,” Muhtar Kent, CEO of The Coca-Cola Company said in a statement.

The latest economic data offered proof that inflation is not a concern. The US consumer price index rose 0.3 percent in June, slowing from a 0.4 percent increase the previous month, according to Labor Department data.

“The inflation numbers are supportive of higher stock prices,” Terry Sandven, chief equity strategist at Minneapolis-based US Bank Wealth Management, told Bloomberg News. “It reflects US economic growth that is neither too slow nor too fast.”

Separately, sales of previously owned homes rose in June, climbing 2.6 percent to an annual rate of 5.04 million units, the highest level in eight months.

"We may see a late season summer push in housing activity,” Nela Richardson, chief economist at Redfin, told Reuters. “Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers."

In Europe, the Stoxx 600 Index jumped 1.3 percent from the previous close, as did Germany’s DAX. The UK’s FTSE 100 Index increased 1 percent, while France’s CAC 40 rose 1.5 percent.

BusinessDesk.co.nz

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