Wall Street Nears Record High On Upbeat Earnings, GDP Data

U.S. stocks inched closer to record levels on Friday, boosted by robust earnings from Google-owner Alphabet and Intel, and data that showed the domestic economy slowed lesser than expected in the second quarter.

The Commerce Department said GDP increased at a 2.1% annualized rate in the second quarter, higher than a 1.8% rate that economists polled by Reuters forecast.

Hopes that the Federal Reserve will cut rates by at least 25 basis points at its policy meeting at the end of this month have powered a solid run in stocks this month, helping Wall Street scale record levels.

The S&P 500 and Nasdaq indexes are now within striking distance of another all time high.

“This is just what the market needed, not so soft that the economy is slowing down precipitously and not so strong that the Fed is going to reverse course,” said Art Hogan, chief market strategist at National Securities in New York.

“We expected bad earnings and bad GDP numbers, but an upside on both is something markets are going to embrace today.”

Alphabet Inc jumped 11.3%, the most on the S&P 500 index, after its quarterly results beat estimates, easing investor concerns about growth challenges faced by its Google advertising business.

Twitter Inc jumped 8.3% after it posted better-than-expected second-quarter revenue and an uptick in daily users who see advertisements on the site.

Their upbeat earnings pushed the communication services sector up 3.22%, the most among S&P sectors.

At 9:45 a.m. ET, the Dow Jones Industrial Average was up 33.77 points, or 0.12%, at 27,174.75, the S&P 500 was up 14.23 points, or 0.47%, at 3,017.90. The Nasdaq Composite was up 77.56 points, or 0.94%, at 8,316.11.

Two weeks into the second-quarter earnings season, about 75% of the 185 S&P 500 companies that have reported so far have topped profit estimates, according to Refinitiv data.

Among other stocks, McDonald’s Corp jumped as much as 2.1% to a record high after beating quarterly sales expectations at established U.S. restaurants.

Intel Corp rose 1% after the chipmaker gave an upbeat current-quarter forecast and raised its full-year revenue guidance, allaying concerns about a global chip slowdown and curbs on U.S. sales to China’s Huawei Technologies Co.

A decliner was Amazon.com Inc, which fell 2.3% after the online retailer reported its first profit miss in two years and said income would slump in the current quarter.

Advancing issues outnumbered decliners by a 1.97-to-1 ratio on the NYSE and a 2.37-to-1 ratio on the Nasdaq

The S&P index recorded 25 new 52-week highs and two new lows, while the Nasdaq recorded 59 new highs and 33 new lows.