July 24, 2019 / 5:29 PM / 2 months ago

US STOCKS-S&P 500 hovers near record levels on chip rally

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* Boeing falls after reporting $3 bln loss

* Caterpillar slips on lower quarterly earnings

* Texas Instruments hits record on upbeat results

* Big Tech faces broad Justice Dept antitrust probe

* Dow down 0.41%; S&P up 0.13%, Nasdaq rises 0.39% (Updates to afternoon)

By Amy Caren Daniel

July 24 (Reuters) - The benchmark S&P 500 index hovered near record levels on Wednesday as semiconductor stocks rallied on reassuring comments from Texas Instruments on global chip demand and blunted the impact of weak earnings from bellwethers Boeing and Caterpillar.

Trade-sensitive Caterpillar Inc dropped 4.4% following disappointing earnings on weak sales in China, and higher production and restructuring costs.

Boeing Co slipped 2.6% after the world's largest planemaker posted its largest-ever quarterly loss on the back of this year's grounding of its best-selling 737 MAX after two deadly crashes.

Their bleak earnings dragged the blue-chip Dow index down more than 100 points, but the surge in chipmakers brought the S&P 500 just 0.3% away from its all-time high of 3,017.80.

"Caterpillar's earnings didn't instill confidence in markets as it shows the negative impact of tariffs and a slowdown in the Chinese economy," said Paul Brigandi, managing director of portfolio management at Direxion Funds in New York.

"Texas Instruments was a much needed optimism for markets and it helped offset some of the global slowdown concern caused by Caterpillar. It also reflects the growing prospects of the chip industry."

Wall Street has scaled new records this month on bets the Federal Reserve would lower rates to counter the impact of a protracted U.S.-China trade war on economic growth.

Texas Instruments Inc jumped 7.5% after the company hinted that a global slowdown in microchip demand would not be as long as feared, powering a 2.84% rise in the Philadelphia chip index to a record high..

The broader technology sector rose 0.45% and provided the biggest support to markets.

Two weeks into an earnings season for which investors have dialed down expectations, about 77% of the 138 S&P 500 companies that have reported so far have topped earnings estimates, according to Refinitiv data.

Overall profits, however, are now expected to fall 0.1%, compared with prior estimate of a rise of about 1%.

At 12:50 p.m. ET, the Dow Jones Industrial Average was down 113.44 points, or 0.41%, at 27,235.75, the S&P 500 was up 3.78 points, or 0.13%, at 3,009.25. The Nasdaq Composite was up 32.04 points, or 0.39%, at 8,283.44.

Another bright spot was United Parcel Service Inc, up 7.7%, and was among the biggest gainers on the S&P 500 index, after the world's biggest package delivery company reported a better-than-expected quarterly profit.

Capping gains was the U.S. Justice Department's announcement of a broad antitrust investigation into big tech companies.

The DoJ did not identify the companies, but the terms of the review pointed to Alphabet Inc, Amazon.com Inc and Facebook Inc. Their shares fell between 0.2% and 1%. Facebook is set to report results after markets close.

Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE and by a 1.98-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and no new low, while the Nasdaq recorded 60 new highs and 81 new lows. (Reporting by Amy Caren Daniel and Karina Dsouza in Bengaluru; editing by Patrick Graham, Saumyadeb Chakrabarty and Sriraj Kalluvila)

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