Strong earnings drive new highs on Wall Street

The Dow and S&P 500 have both set new intraday record highs today, with a rash of companies beating earnings expectations and jobless claims dropping.

The Dow had moved off its highs by 7pm BST, trading at 15,547 up 0.5%, but had ascended as far as 15,589.4 earlier in the day, a new record for the blue chip index. The S&P 500 also set a fresh all-time high, touching 1693.12 before easing back to 1687.1 which is just below the previous record high.

The Dow was lifted by strong quarterly earnings from UnitedHealth Group, which gained more than 6% after reporting earnings of $1.40 per share ($1.26 had been expected), and IBM, which announced better-than-expected second-quarter earnings after the close last night and upped its outlook for the year. Verizon, another Dow component, just managed to beat earnings expectations, but narrowly missed on the revenue front, with weakness in its traditional wireline business offsetting strong growth in its wireless divison. Shares in the telecommunications company slid 2%.

It has been a fantastic quarter for the banking sector so far, and Morgan Stanley was in line with that trend, posting a 42% rise in quarterly earnings. Its shares climbed 4.5%, and other US banks also fared well, with Bank of America up 3.5% and JP Morgan gaining 1.8%.

Not all reports were so strong though. Ebay and Intel both disappointed with their full-year forecasts, dragging the NASDAQ 100 down 0.4% to 3072 by early afternoon in New York. Quarterly earnings will likely continue to dominate attention for the rest of the week, with Google, Microsoft and AMD all reporting after the market closes tonight and we hear from General Electric tomorrow.

At the macro level, US initial jobless claims fell by 24,000 to 334,000 (adjusted for seasonality), which is the lowest level seen in four months and a better result than had been anticipated by analysts polled by Reuters.

The Philly-Fed survey, a gauge of business levels in the US mid-Atlantic, climbed to its best level in more than two years.

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