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US: Google propels Nasdaq to another record high close

Saturday, July 18, 2015 - 06:45

[NEW YORK] A major rally in Google pushed the Nasdaq to a second straight record high on Friday while weak energy stocks weighed on the Dow and S&P 500.

Google surged 16.26 per cent to end at an all-time high of US$699.62, a day after reporting strong ad revenue growth. It was Google's largest one-day percentage gain since April 2008.

Facebook rose 4.53 per cent to a record high of US$94.97 on hopes that it could mirror Google's ad growth. Etsy spiked 30 per cent thanks to a nod from Google during its conference call.

But a drop in oil prices limited gains on the broader stock market, with the S&P 500 energy index down 1.07 per cent to its lowest level since January 2013. Chevron lost 1.4 per cent. The utilities index dropped 1.06 percent.

Wall Street insiders were cautiously optimistic about upcoming quarterly reports after some results this week came in above expectations. "It's going to be better than what the consensus numbers were pointing to," said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. "Our economy is doing okay. We're not growing at 5 per cent but we have slow, steady growth and I think that continues." The Nasdaq Composite added 46.96 points, or 0.91 per cent, to end at 5,210.14, its second straight record high close.

The S&P 500 gained 2.35 points, or 0.11 per cent, to end at 2,126.64, just shy of its record high of 2,130.82.

The Dow Jones industrial average fell 33.8 points, or 0.19 per cent, to end at 18,086.45.

Boeing fell 1.11 per cent and was the biggest drag on the Dow after it said it will take a second-quarter charge related to problems with its KC-46 aerial refueling tanker aircraft program.

General Electric shares rose 0.74 per cent after raising its 2015 outlook for its industrial manufacturing businesses.

The technology index was the sole gainer among the 10 major S&P 500 indexes, up 1.75 per cent, mostly because of Google.

For the week, the Dow gained 1.8 per cent, the S&P added 2.4 per cent and the Nasdaq rose 4.3 per cent, its largest weekly gain since October 2014.

The dollar saw its biggest weekly gain in two months due to expectations of a Federal Reserve rate hike this year. However, a strong dollar reduces the value of US companies' overseas income.

US companies have been expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar. Profit is expected to have fallen 2.9 per cent, according to Thomson Reuters estimates.

Declining issues outnumbered advancing ones on the NYSE by 2,000 to 1,076, for a 1.86-to-1 ratio; on the Nasdaq, 1,676 issues fell and 1,115 advanced for a 1.50-to-1 ratio favoring decliners.

The S&P 500 posted 21 new 52-week highs and 25 new lows; the Nasdaq saw 107 new highs and 87 new lows.

Volume was a bit light, with about 6.1 billion shares traded on US exchanges, below the 6.6 billion average so far this month, according to BATS Global Markets.

REUTERS