Dow Tops 22000, Boosted by Apple

The Dow Jones Industrial Average rose above 22000 for the first time, as Apple shares gave the index its latest earnings-fueled boost.

 

The Dow industrials rose 46 points, or 0.2%, to 22010, on track for its seventh straight session of gains. The 30-member index has climbed around 11% so far this year, fueled by signs of global growth and strong corporate earnings.

 

Tech stocks gained after Apple ’s most recent quarterly earnings, released late Tuesday, beat Wall Street expectations. Its shares rose around 5%, on track for their largest advance in six months and adding roughly 50 points to the Dow industrials.

 

Technology firms like Apple have powered U.S. indexes to new highs this year, attracting investors with their ability to grow earnings during a period of tepid economic expansion. The S&P 500 technology sector is up 23% this year—the index’s best performer. It was up 0.6% Wednesday.

“The tech sector as a whole has some room to appreciate,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. Still, Mr. McMillan warned that investor appetite is mostly driven by a few sector giants.

 

”When you look at the history of stocks that could do no wrong, usually it ends up in tears,” he said.

 

Although Apple drove most of Wednesday’s gain, Boeing has been the biggest contributor to the Dow industrials’ latest 1000-point move. The aerospace giant has contributed nearly 400 points since the blue-chip index hit 21000 in March through Tuesday’s close, with much of its gains coming in the past week after the company’s quarterly earnings. Shares were up 0.7% Wednesday.

The S&P 500 swung between small gains and losses and was recently down less than 0.1%. The Nasdaq Composite fell less than 0.1%.

 

Both indexes have retreated slightly in the past week but are still not far off all-time highs, with earnings for the most recent quarter continuing to come in ahead of analyst expectations.

 

Nearly three-quarters of the S&P 500 has reported results so far, with more than 70% of the companies beating earnings estimates as of Wednesday morning, according to FactSet. Companies that have reported so far have posted around 11% growth in earnings per share from the same quarter a year earlier, a higher figure than Wall Street anticipated entering reporting season.

 

A day after soft economic data supported U.S. bond prices, Treasurys were little changed. The yield on the 10-year U.S. Treasury note was at 2.257%, according to Tradeweb, compared with 2.253% Tuesday. Yields fall as prices rise.

 

In European afternoon trading, the Stoxx Europe 600 was down 0.3%, dragged lower as several large banks posted disappointing results. Standard Chartered was among the worst performers. Shares fell despite the bank’s improved second-quarter profit, after executives said the bank still has a long way to go to improve returns.

Taiwan is home to a number of Apple suppliers, and its Taiex stock benchmark was the region’s best performer, closing up 0.8%. Technology firms also aided Hong Kong’s Hang Seng Index, which closed 0.2% higher.

 

Positive earnings have been boosting markets since early July. They were also behind gains in Japanese shares Wednesday. The Nikkei closed up 0.5%.

 

Global markets are “going to stay the course through the completion of earnings season,” said Tom White, chief market strategist at TD Ameritrade Inc. subsidiary Tradewise Advisors Inc. “I see the market staying relatively strong as there’s no downside catalyst.”