S&P 500, Nasdaq Top Prior Record Closing Levels – The Wall Street Journal

The S&P 500 and Nasdaq Composite climbed above their all-time closing highs in midday trading Tuesday, marking a resurgence for stocks to all-time levels after a rout late last year hampered their climb.

The broad index recently rose 0.9% to 2934.68, breaking past its previous all-time closing high on Sept. 20 and putting it on pace to notch its first record since then. The Nasdaq jumped 1.2% to 8114.72, topping its Aug. 29 record closing level.

The S&P 500 has advanced 17% this year, putting the index off to its best start to a year since 1987. Major indexes have been mostly grinding higher in recent weeks, continuing this year’s ascent in the wake of the Federal Reserve’s cautious tilt on monetary policy, growing optimism over a U.S.-China trade deal and better-than-feared corporate earnings.

The rebound has helped rejuvenate investors’ outlook for the bull market’s longevity after the S&P 500 in December was on the brink of ending the longest bull run in history.

Upbeat profit reports helped pushed major U.S. indexes higher Tuesday, with shares of social-networking platform

Twitter
,

aerospace giant Lockheed Martin and

United Technologies

all rising after the companies reported better-than-expected earnings for the first three months of the year.

Earnings were so strong at Lockheed and United Technologies that executives there raised their full-year earnings forecasts, encouraging investors that corporate profits remain healthy.

Stocks aren’t alone. Other asset classes have also bounced back, with U.S. oil prices surging 46% in 2019 after sliding into a bear market in November. They rose 1.2% on Tuesday.

“It’s almost like the market is calling a mulligan on what transpired in the fourth quarter,” said Michael Baele, senior portfolio manager at U.S. Bank Private Wealth Management, in a recent interview. “The reality of the Fed pushing rates higher and the potential for tariffs biting world trade sank in then and the market turned manic, but now all of those concerns have lifted.”

Tuesday’s earnings reports add to a brightening picture for corporate profits. With more than 100 S&P 500 companies having reported results, nearly 79% have beaten analysts’ profit estimates, outpacing the 69% of companies that did so in the previous quarter, according to FactSet.

The Persian Gulf Star refinery in Bandar Abbas, Iran. Oil prices have surged lately.


Photo:

Ali Mohammadi/Bloomberg News

“You’re seeing some evidence that companies are doing well,” said Tom Martin, a senior portfolio manager at Globalt Investments. “But you would expect them to beat since expectations had come down a bit,” Mr. Martin added, referring to analysts’ slashing first-quarter profit growth forecasts for the S&P 500 ahead of the reporting season.

Meanwhile, the Dow Jones Industrial Average gained 119 points, or 0.5%, to 26630.

So far, earnings growth across the S&P 500 is coming in ahead of analysts’ projections. The broad index is now on track to see first-quarter earnings growth shrink 3.4% from a year earlier, according to FactSet, compared with analysts’ expectations of a 4% drop earlier this month.

Many of those reports are translating into higher share prices. Shares of Twitter rose 17% Tuesday after the social media company reported gains in revenue, profits and daily users. Lockheed Martin rose 6.4% after the aerospace company raised its full-year financial guidance and said revenue climbed to a record $133.5 billion.

Better-than-expected U.S. economic data have helped investors brush off fears that slowing growth around the world is seeping into the U.S. economy. Those concerns rocked financial markets in the fourth quarter, sending the S&P 500 down 14%–its worst three-month period since the height of the financial crisis in 2008.

Cyclical sectors tied to the health of the U.S. economy have powered stocks in 2019. Technology, consumer discretionary and industrials–among the hardest hit groups in the fourth-quarter selloff–are the top three sectors driving the broader market higher this year, each up at least 22%.

Technology stocks, which were battered in the second half of last year on global trade tensions and increased government regulation, have regained their crown as the market leader. Signs of slowing growth at big tech companies and worries over high valuations had weighed on investor confidence, but investors have largely shaken off those fears for now.

Elsewhere Tuesday, the Stoxx Europe 600 added 0.3%, while Hong Kong’s Hang Seng closed flat and Japan’s Nikkei 225 gained 0.2%.

U.K. investors remained focused on Brexit, with little more than a month left before European Parliament elections take place. If the U.K. finds a way to leave the bloc before then, it won’t be required to hold the vote. The British pound gained 0.2% against the dollar at $1.3004.

Oil markets were also jolted by a U.S. move to ban countries from importing Iranian oil, with waivers granted to countries including China, India and Turkey slated to end May 2. The tightened restrictions could remove over 1 million barrels of Iranian supplies from the market a day.

Write to Jessica Menton at Jessica.Menton@wsj.com and Michael Wursthorn at Michael.Wursthorn@wsj.com