S&P 500 hits record high; results, data in focus

The S&P 500 and Nasdaq has risen, with the benchmark index touching an intraday record high as investors geared up for a week packed with corporate earnings and crucial economic data that will likely test stretched stock market valuations.

Chip stocks drove the gains, with the S&P 500 building on the record close it notched on Friday after major banks kicked off the third-quarter corporate earnings season on a positive note.

Growth stocks such as Nvidia and Apple gained 2.2 per cent and 1.6 per cent, respectively. An index of semiconductor companies jumped to a more than two-month high.

Five of the 11 S&P 500 sectors inched higher, with Technology shares in the lead, gaining 1.5 per cent. Energy fell 0.4 per cent, tracking lower oil prices.

The Dow, however, was bogged down by Caterpillar , which dipped three per cent after Morgan Stanley downgraded the equipment maker to "underweight" from "equal weight".

The Dow Jones Industrial Average fell 42.89 points, or 0.10 per cent, to 42,820.42, the S&P 500 gained 29.72 points, or 0.51 per cent, to 5,844.75 and the Nasdaq Composite gained 158.43 points, or 0.86 per cent, to 18,501.37.

Boeing also dragged on the Dow and was down 2.4 per cent after the planemaker flagged a larger-than-expected Q3 loss on Friday. It also said it would cut 17,000 jobs and delay first deliveries of its 777X jet by a year.

Bank earnings may have boosted hopes that solid results could help stocks continue their strong 2024 run. However, with stock valuations stretched - the S&P 500 is trading at 21.8 times forward earnings, versus a long-term average of 15.7 - companies might struggle to satisfy investors.

"We closed pretty strong on Friday, thanks to the bank earnings results. JPMorgan was clearly the standout, setting a tone of optimism going into a bigger part of earnings season this week," said Michael James, managing director of equity trading at Wedbush Securities.

Forty-one S&P 500 companies are expected to report results this week, including Bank of America, Citigroup, Johnson & Johnson and Netflix.

Year-over-year third-quarter earnings growth for the S&P 500 is estimated at 4.9 per cent, according to data compiled by LSEG on Friday.

Investors will also watch for crucial economic data, notably the September retail sales figures, due on Thursday, for clues on the financial health of US consumers.

Meanwhile, Minneapolis Fed President Neel Kashkari said he sees modest interest-rate cuts ahead as inflation looms near the central bank's two per cent target.

Fed Governor Christopher Waller is also scheduled to speak later in the day.

Bets on a 25-basis-point reduction at the Fed's November meeting stood at 84.2 per cent, according to the CME Group's FedWatch tool, as traders dialed back expectations of an outsized cut.

Investment bank B. Riley Financial leapt 20 per cent after the company said it had agreed to sell its unit, Great American Group, to asset management firm Oaktree Capital in a $386-million deal.

US-listed shares of Chinese firms dropped, with Alibaba down 1.3 per cent and PDD Holdings losing 3.9 per cent, as investors were left guessing the size of the overall fiscal stimulus China announced on Saturday.

Declining issues outnumbered advancers by a 1.41-to-1 ratio on the NYSE, and by a 1.23-to-1 ratio on the Nasdaq.

The S&P 500 posted 32 new 52-week highs and one new low, while the Nasdaq Composite recorded 79 new highs and 36 new lows.