US: Nasdaq, S&P 500 end at fresh records, Dow also gains

[NEW YORK] Wall Street stocks finished at fresh records on Tuesday continuing the positive momentum for equities as data showed improving US manufacturing trends.

The tech-rich Nasdaq Composite Index jumped 1.4 per cent to 11,939.67 to post a third straight record.

The broad-based S&P 500 also finished at a record, winning 0.8 per cent to 3,526.65, while the Dow Jones Industrial Average also gained 0.8 to end at 28,645.66.

Analysts have said the current stock-buying boom is reflective of investors' "fear of missing out" on future gains as equities drift higher during a low-volume trading period.

Although US unemployment remains elevated and several sectors continue to experience great pain, analysts expect the recovery to lead to strong earnings growth soon in the wake of massive support from Washington.

The market expects record profits in the fourth quarter of 2021, said Howard Silverblatt, senior analyst at S&P Dow Jones Indices.

"If, for any reason, the market needs to change that belief, even if it is just a timing change, it will need to reprice, and given the profits are so concentrated, that could be ugly," Mr Silverblatt said in a note.

In economic data, The Institute for Supply Management's manufacturing index rose more than expected in August, with key metrics continuing their expansion after business shutdowns caused by Covid-19 badly hit factories earlier this year.

Among individual companies, Walmart surged 6.4 per cent after unveiling a long-discussed membership program to provide free delivery and compete directly with Amazon's popular "Prime" service.

Tesla shares fell 4.7 per cent after announcing it would raise up to US$5.0 billion with an offering of newly-issued shares. The pullback comes a day after a stock split following the electric car maker's surge this year.

Zoom Video Communications leaped 40.8 per cent after reporting that quarterly profit shot up to US$186 million compared with US$5.5 million in the year-ago period. The Silicon Valley-based company that has become a popular way to work, learn or socialize during the pandemic.

McDonald's fell 0.4 per cent after the fast-food chain was sued by more than Black former McDonald's franchisees, who claimed a "systematic" pattern of racial discrimination. McDonald's said it would fight the suit.

AFP