More positive Q2 reporting coming in today that shot the Dow up another 79 points with particularly upbeat results from the transportation sector, Amazon touching the $900 billion mark for the first time and threatening Apple’s standing as history’s most valuable company, and Berkshire Hathaway getting a big boost by the expectation of stock buy backs.  The only bad news:  “The market would be a lot higher right now if it wasn’t for people worried about trade.”  Almost ten percent of the S&P has reported in and now 87, not 85 percent, that are beating forecasts, causing the Q2 forecast to be pushed up again, today to 21.4 percent, up from 21.2 yesterday and 20.7 July 1.  And another warning from Chairman Powell that the tariffs could pose a risk to the U.S.  At 6 billion shares traded, volume is still lighter than average but creeping ever closer. 

wed  JULY 18, 2018 / 5:12 pm 

S&P 500 climbs to over five-month high on strong earnings

Stephen Culp

DJ:  25,199.29  +79.40       NAS:  7,854.44  -0.67         S&P:  2,815.62  +6.07       7/18

NEW YORK (Reuters) - The S&P 500 rose to its highest in more than five months and the Dow climbed for a fifth session on Wednesday as solid earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.

Upbeat earnings from railroad CSX Corp (CSX.O) and airline United Continental (UAL.N) helped lift the S&P 500 industrials index .SPLRCI, which gained 1.1 percent and was among the day’s best-performing sectors.  The Dow Jones Transport Average .DJT jumped 2.3 percent, its biggest daily advance in three months. 

Although it is still early in the reporting period, estimates for the U.S. earnings season are improving as more companies release results.  S&P 500 earnings are now expected to have increased 21.4 percent in the second quarter, up from an estimate of 20.7 percent on July 1. Of the 48 companies in the index that have reported so far, 87.5 percent posted earnings above analyst expectations.   “We’ve been having this very nice rally,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York. “The reason for that is earnings and valuations.”

“I think the market would be a lot higher right now if it wasn’t for people worried about trade,” Kaufman said.

Federal Reserve Chairman Jerome Powell, questioned by members of a House of Representatives committee, repeated on Wednesday that rising world protectionism would over time pose a risk to a U.S. and global expansion that appears largely on track to continue.

The Dow Jones Industrial Average .DJI rose 79.4 points, or 0.32 percent, to 25,199.29, the S&P 500 .SPX gained 6.07 points, or 0.22 percent, to 2,815.62 and the Nasdaq Composite .IXIC dropped 0.67 point, or 0.01 percent, to 7,854.44. 

Data showed the U.S. housing market continues to be an economic soft spot. Housing starts fell 12.3 percent in June to a nine-month low as homebuilders struggled with higher lumber prices and persistent land and labor shortages.

Amazon.com’s (AMZN.O) stock market value briefly reached $900 billion for the first time, marking a major milestone in its 21-year trajectory as a publicly listed company and threatening to dislodge Apple (AAPL.O) as Wall Street’s most valuable jewel.  Berkshire Hathaway (BRKb.N) led the financial sector higher, rising 5.3 percent on news that the company eliminated a restriction on its ability to buy back its own stock.  Morgan Stanley (MS.N) shares rose 2.8 percent after the investment bank reported better-than-expected quarterly profit.  Shares of Google parent Alphabet (GOOGL.O) edged lower after EU antitrust regulators hit the tech company with a record $5 billion fine. 

Advancing issues outnumbered declining ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored advancers.  The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 102 new highs and 47 new lows.

Volume on U.S. exchanges was 6.0 billion shares, compared to the 6.48 billion average over the last 20 trading days.