Earnings, data and oil were more than enough to push the major indexes to new all-time highs.
The S&P 500 rose 0.5% to 2,473.83 today, while the Dow Jones Industrial Average advanced 66.02 points, or 0.3%, to 21,640.75. The Nasdaq Composite gained 0.6% to 6,385.04. All three index closed at new record highs. The S&P 500 Energy Sector rose 1.4% after oil gained 1.6% to $47.12.
The rally in tech stocks meant that the S&P 500 Information Technology index closed at a new all-time high for the first time since March, 2000. It also means that I can breathe a little easier following my June cover story which predicted, perhaps a bit too early, that the tech rally would resume. Instinet’s Frank Cappelleri marvels at the Nasdaq, which has rallied for a ninth consecutive day:
[Through the] first 12 trading days of July, the index has experienced advances in 10 of them… As we all know, the spirited turnaround started AFTER the NDX had breached a key uptrend line, courtesy of a solidly negative second half of June. But the index DID respect that May 17th low soon thereafter, and the dip buying resumed with renewed ferocity.
…[This] is now the second nine day advance of 2017 (the last being the period ending 2/15). The NDX made higher highs for another four weeks back then, before that mid-March hiccup emerged. Over the last five years, the index has experienced at least 10 straight gains three times, including 13 consecutive advances from June – July, 2013. So, we’re not breaking records just yet.
JPMorgan’s David Hensley and team argue that the U.S. economy saw “relatively strong” growth during the second quarter, with today’s housing number helping out:
The US economy appears to have expanded at a relatively strong 3%-plus pace in 2Q, up from 1.4% in 1Q. Domestic demand drove the acceleration. According to our estimates, household consumption, business capex, and government spending all contributed more to growth in 2Q than in 1Q. One exception is housing. Our team believes residential investment posted a modest decline last quarter. US housing starts track this pattern, having trended up through 1Q followed by a pullback in 2Q. That said, today’s June report tempered the extent of the reported weakness and offered tentative support for a resumption of growth. Starts jumped 8.3% to 1.215mn saar in June while housing permits increased 7.4% to 1.254mn saar. These figures were above expectations and there were also net upward revisions reported for the starts data in earlier months. Fundamentally, the supports for housing demand appear positive. Job growth is holding up, interest rates remain low, and confidence is fairly high.
Wouldn’t that be nice?