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US: S&P, Nasdaq hit record highs as volatility drops

Tuesday, May 9, 2017 - 22:05

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[NEW YORK] The S&P 500 and the Nasdaq hit record intraday highs for the second day in a row on Tuesday as market volatility dropped to a decade low following Emmanuel Macron's victory in the French presidential election and strong US. corporate earnings.

The VIX, Wall Street's "fear gauge", hit 9.57 points, the lowest since late 2006, a day after closing at its lowest level in over two decades. A falling VIX typically indicates a bullish outlook for stocks.

The 10-year U.S. Treasury yield rose to its highest in a month, while gold prices fell, indicating a shift in investor preference for riskier assets.

At 9.34 am ET (1334 GMT), the Dow Jones Industrial Average was up 21.5 points, or 0.1 per cent, at 21,033.78.

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The S&P 500 was up 2.57 points, or 0.11 per cent, at 2,401.95, slightly below its all-time high of 2,402.42.

The Nasdaq Composite was up 11.72 points, or 0.19 per cent, at 6,114.38, after hitting an all-time high of 6,116.47.

Five of the 11 major S&P sectors were higher, while the typically defensive plays such as utilities and telecom services fell.

Since Donald Trump's election in November the S&P 500 has risen nearly 14 per cent, raising questions about market valuations. However, solid first-quarter earnings could allay some of those fears.

S&P 500 earnings on average have grown 14.4 per cent, up from 10.1 per cent estimated at the start of the earnings season.

REUTERS

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