Strong earnings reports boost US stock markets

US equities finished higher on Thursday, boosted by gains in Apple and Amazon ahead of their earnings reports, while solid results from companies including Caterpillar and Merck helped ease concerns about slowing economic growth denting profits.

High-profile stocks Tesla , Apple and boosted the Nasdaq and helped propel the index to a record after the S&P 500 and Dow reached fresh peaks earlier in the week.

Both Apple and Amazon were scheduled to post quarterly results after the closing bell.

Caterpillar added rose after reporting a better-than-expected quarterly profit on rising commodity prices, while a bullish forecast from drugmaker Merck & Co helped boost its shares.

Investors were also keeping an eye on Washington where President Joe Biden said he had secured a new US$1.75 trillion framework for economic and climate change spending.

“Earnings continue to be very good,” said Bill Stone, chief investment officer at the Glenview Trust Co in Louisville, Kentucky, who also noted that Biden’s framework, if it succeeds, would not boost corporate taxes as investors had previously feared.

“Underneath the surface, that’s a positive for corporate earnings” going forward, said Stone.

The S&P 500 gained 0.9 percent to 4,596, while the Nasdaq Composite gained 1.4 percent to 15,448. The Dow Jones Industrial Average rose 0.7 percent to 35,730.

Solid earnings also helped offset a report from the Commerce Department which showed the U.S. economy grew at a 2 percent annualized rate in the third quarter as Covid-19 infections flared up, short of the 2.7 percent estimate, while another set of data showed fewer Americans filed new claims for unemployment benefits last week as the labour market slowly improves.

“Clearly we are seeing a large batch of macroeconomic data that has been coming through during the middle of third-quarter earnings reporting season and you are seeing a little bit of a tug-of-war that exists between macroeconomic data that is appearing to be somewhat softer at the margin and corporate performance which is proving to be better than expectations,” said Bill Northey, senior investment director at US Bank Wealth Management in Minneapolis. (Reuters)