|Friday, April 28, 2017

Nasdaq jumps 0.9%, ends at record close as US stocks rally 

NEW YORK, Apr 21: The Nasdaq surged to a record on Thursday (Apr 20) as US stocks shrugged off geopolitical worries and rallied on better earnings and optimism about the American economy.

The Nasdaq Composite Index jumped 53.74 points (0.92 per cent) to 5,916.78, up 0.9 percent and about two points higher than the prior record set in March.

The Dow Jones Industrial Average gained 174.22 points (0.85 per cent) to 20,578.71, while the broad-based S&P 500 advanced 17.67 points (0.76 per cent) to 2,355.84.

US investors put to the side worries about Syria, North Korea and the French presidential election that have pressured stocks over the last month.

The pullback over this period offered an opportunity that some investors grabbed, said Nate Thooft, senior managing director at Manulife Asset Management.

There’s a “lot of headline risks,” but the “raw underlying fundamentals are pretty good,” Thooft said.

Analysts estimate US corporate earnings will come in about 10 per cent higher in the first quarter compared with the year-ago period.

Investors were also feeling more optimistic about the prospects for tax cuts under US President Donald Trump after Treasury Secretary Steven Mnuchin highlighted it as a priority at a Washington event.

Dow member American Express jumped 5.9 per cent after reporting that first-quarter earnings were US$1.34 per share, six cents above analyst expectations.

Verizon Communications lost 1.1 per cent after reporting that first quarter earnings dropped 19.8 per cent to US$3.6 billion as it lost 307,000 wireless subscribers during the period.

Other companies with large moves following earnings reports included: freight rail company CSX, which rose 5.6 per cent; Philip Morris International, which fell 3.5 per cent; and eBay, which dropped 3.9 per cent.

Steel companies got a boost after Trump ordered an investigation into whether foreign steel producers were dumping the metal on the US market. United States Steel gained 7.8 per cent and Nucor rose 4.9 per cent.