New Index Records on Wall Street, Strong Company Results

On Thursday, the Dow Jones and S&P 500 indices reached new record levels on Wall Street, thanks to better-than-expected business results from several companies and investors’ confidence that the Fed will not prematurely reduce stimulus monetary measures.

The Dow Jones strengthened by 0.50 percent to 15,548 points, while the S&P 500 rose by 0.50 percent to 1,689 points, and the Nasdaq index increased by 0.04 percent to 3,611 points.

On the second day of testimony in Congress, Fed Chairman Ben Bernanke stated, as he did the day before, that the timelines for reducing stimulus monetary programs are not ‘set in stone’ and will depend on the economic situation.

– There were no negative surprises from Bernanke, so the market reacted positively to the report, although there is nothing new in it – says Bucky Hellvig, Vice President at BB&T Wealth Management.

The biggest winner, with a rise of 1.3 percent, was the S&P financial sector index. The price of Morgan Stanley’s stock jumped by 4.4 percent after the bank reported a 42 percent increase in profits in the second quarter, significantly above expectations, which boosted the entire sector.

IBM’s stock, on the other hand, rose by 1.8 percent, as the tech giant exceeded earnings expectations and raised its forecasts for the entire year.

Conversely, Intel’s stock price plummeted by 3.8 percent after the world’s largest chip manufacturer lowered its forecasts for this year. For the same reason, eBay’s stock fell by 6.7 percent.

Despite the record index levels, investors are cautious, as indicated by below-average trading volume. On Wall Street, NYSE MKT, and Nasdaq, 6.1 billion shares changed hands yesterday, while the average daily volume this year is 6.4 billion.

European stock prices also rose yesterday. The London FTSE index strengthened by 0.95 percent to 6,634 points, while the Frankfurt DAX rose by 1.0 percent to 8,337 points, and the Paris CAC increased by 1.44 percent to 3,927 points.