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S&P 500, Nasdaq post record closing highs

Stocks surged as stronger-than-expected earnings results from companies across sectors boosted investor confidence, sending the S&P 500 and Nasdaq to new all-time closing highs.

The S&P 500 (^GSPC) rose 0.88%, or 25.7 points, as of market close to reach 2,933.68. This exceeded the index’s previous record close of 2,930.75, but remains below the index’s all-time intraday high of 2,940.91.

The Nasdaq (^IXIC) rose 1.32%, or 105.56 points to a new record closing high of 8,120.82. The tech-heavy index’s previous closing high was 8,109.69, while its all-time intraday high remains at 8,133.3.

The Dow (^DJI) rose 0.55%, or 145.34 points, and closed at 26,656.39. This is within 1% from the index’s all-time record closing high of 26,828.39.

As of market close Tuesday, the S&P 500 was up 17% for the year-to-date against a backdrop of firming economic data and a Federal Reserve that has now telegraphed it intends to pause on interest rate hikes this year.

“The questions will be asked, ‘Is now the time to get in?’ or ‘Is now the time to get out?’ Look at the big picture – the economy is in solid shape, the labor market is the tightest in 50 years and getting tighter, and interest rates are low,” Greg McBride, Bankrate chief financial analyst, wrote in an email. “But this market is not a bargain-hunter’s paradise. Be prepared for a return of volatility and for returns to be harder-earned than what we’ve seen thus far in 2019.”

On the heels of a steep pullback in equity markets at the end of 2018, some analysts remain cautious about the prospects of a near-term continued surge in prices.

“The economy has been resilient and corporate earnings are coming in better than expected – although still at growth rates that are more indicative of a stable economy, but not an accelerating one, so it’s hard to justify valuations at this point and we would be concerned of another pullback in the next 3-6 months,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in an email.

However, “over the long-term, this bull market should be able to sustain any pullbacks and could run for another 1-2 years from here so we remain positive over the longer term, despite our near term cautiousness,” he added.

Tuesday’s stock market advances came following strong quarterly earnings results before-the-bell from companies including Twitter, United Technologies and Coca-Cola.

As of Tuesday, just over one-fifth of the S&P 500’s market capitalization had reported first-quarter results. Earnings were beating by 6.0%, and 78% of companies beat their bottom-line estimates, according to an analysis by Jonathan Golub, chief equity strategist for Credit Suisse. Over the past three years, companies beat their earnings expectations by an average of 5.4%, with 71% exceeding bottom-line estimates.

Elsewhere, the U.S. dollar index (DX-Y.NYB) rallied as high as 97.78 during intraday trading, hitting the highest level since June 2017.

Meanwhile, oil prices added to gains from Monday after Secretary of State Mike Pompeo announced that the U.S. will no longer grant sanction exemptions to countries buying oil from Iran. The Trump administration’s goal is to bring Iran’s oil exports “to zero,” and earlier reports of the announcement pushed prices higher as investors anticipated a tightening of global oil supplies.

U.S. West Texas Intermediate (CL=F) rose as much as 1.5% to $66.60 per barrel, hitting the highest intraday price since Oct. 31. Prices for the commodity settled at $66.30 per barrel. Brent crude oil futures (BZ=F) reached as high as $74.73, or the highest level since early November.

STOCKS

Coca-Cola (KO) beat Wall Street’s expectations for quarterly results on the top- and bottom-lines as the company’s efforts to pivot to products aside from sugary drinks paid off. Comparative earnings per share totaled 48 cents in the fiscal first quarter on revenue of $8.02 billion, exceeding expectations for earnings of 46 cents and sales of $7.88 billion. Case unit volume rose 2% in the first quarter, driven by a 7% increase in unit case volumes in Asia Pacific region. Within this metric, water, enhanced water and sports drinks grew 6%, while sparkling soft drinks grew 1%.

Twitter (TWTR) increased its monetizable daily active users (mDAU) in the March quarter, helping drive better-than-expected quarterly revenue and profit. The company’s mDAU grew 11% year-over-year to 134 million in the fiscal first quarter. Monthly active users – which the company will no longer break out after Tuesday’s report – declined by 6 million over last year to 330 million. Adjusted earnings of 37 cents per share on revenue of $787 million topped expectations for earnings of 15 cents per share on sales of $775 million.

FILE - In this Feb. 8, 2018, file photo, the logo for Twitter is displayed above a trading post on the floor of the New York Stock Exchange. Twitter reports financial results Tuesday, April 23, 2019. (AP Photo/Richard Drew, File)

Verizon Communications (VZ), the parent company of Yahoo Finance, posted stronger-than-expected first-quarter earnings and raised its earnings forecast for the year, but posted a loss in phone subscribers in the first quarter. Phone subscribers declined by 44,000 in the fiscal first quarter, but total wireless subscriber additions netted an increase by 61,000 as a rise in subscribers for other connected devices offset postpaid phone subscriber losses. Earnings per share of $1.20 beat consensus expectations by 3 cents, while total operating revenue of $32.1 billion was in-line with estimates, according to Bloomberg data.

United Technologies (UTX) beat consensus expectations on the top and bottom-lines, with adjusted earnings per share coming in 20 cents ahead of estimates at $1.91 in the first quarter and sales of $18.4 billion exceeding expectations for $17.99 billion. The company also boosted its 2019 earnings outlook to see adjusted earnings of between $7.80 and $8 per share, raising the low end of its guidance by 10 cents. As with peer Honeywell (HON), United Technologies reported strength in its aerospace unit, with the segment posted a 71% year-over-year rise in sales.

Procter & Gamble (PG) topped Wall Street’s expectations in its fiscal third-quarter results as consumers continued to purchase the company’s products even after price increases went into effect earlier this fiscal year. P&G’s organic revenue rose 5% in the third quarter, with beauty category organic sales up 9%. Net quarterly sales were $16.46 billion – better than the $16.36 billion expected – while core earnings per share of $1.06 beat expectations by 3 cents.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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