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The S&P 500 on Tuesday closed at its highest level since Feb. 1 as Alphabet’s blowout results bolstered expectations of a robust earnings season.

Earlier in the session, the benchmark S&P 500 index touched its highest level since Feb. 1.

Alphabet Inc. shares jumped to a record high of US$1,275.00 after the online search company’s quarterly results surpassed Wall Street estimates. The shares closed up 3.9 per cent at US$1,258.15.

Google’s parent company was the biggest boost to the S&P 500. Others in the so-called FANG group of momentum stocks rose as well. Shares of Facebook Inc. and Amazon.com Inc. were up 1.8. per cent and 1.5 per cent, respectively. Both companies report earnings later this week.

“Today, it’s an earnings story, pure and simple,” said Jim Awad, senior managing director at Hartland & Co in New York. “It’s been a very good second quarter.”

The Dow Jones Industrial Average rose 196.57 points, or 0.78 per cent, to 25,240.86, the S&P 500 gained 13.34 points, or 0.48 per cent, to 2,820.32.

The Nasdaq Composite dropped 1.11 points, or 0.01 per cent, to 7,840.77. It reversed course after having hit a record high earlier in the session.

So far in 2018, the Nasdaq has climbed more than 13 per cent, more than twice the year-to-date percentage gain of the S&P 500. Some investors said the Nasdaq’s reversal indicated some profit-taking driven by lingering concerns over trade issues. Earlier on Tuesday, U.S. President Donald Trump extolled tariffs in a post on Twitter.

“It leads me to believe that underneath it all, investors are worried about the tariff situation and what the implications are going to be for corporate profits in the third quarter,” Awad said. “If you’re looking to raise cash because you’re uncertain, you take it where you have the biggest profits.”

Agriculture-related stocks gained on news that the Trump administration plans to announce aid for U.S. farmers to help protect them from potential impacts related to trade spats between the United States and its trade partners.

In Toronto, the S&P/TSX composite index fell 30.71 points, or 0.19 per cent, to 16,390.13 despite a 0.9-per-cent rise in materials stocks and a modest 0.2-per-cent rise by energy stocks.

Industrial stocks declined 1.1 per cent on the day. Canadian Pacific Railway Ltd. was down 2.2 per cent, while rival Canadian National Railway Co. dropped 0.5 per cent.

Health care stocks dropped 2.5 per cent as cannabis producers weighed, while both consumer discretionary and staples stocks fell more than 1.1 per cent.

In Europe, Germany’s DAX rose 1.1 per cent and the CAC 40 in France added 1 per cent. The FTSE 100 index of leading British shares gained 0.7 per cent. Major indexes in Asia finished higher. Japan’s Nikkei 225 gained 0.5 per cent, while South Korea’s Kospi added 0.5 per cent. Hong Kong’s Hang Seng jumped 1.4 per cent. Australia’s S&P-ASX 200 rose 0.6 per cent.

The Canadian dollar nudged higher versus the greenback on Tuesday in step with higher oil prices, while domestic 10-year government yield reached a five-week peak, supported by the view of solid economic growth.

News that China will adopt a more vigorous fiscal policy to combat slowing economic growth and to counter its current trade tension with the United States renewed appetite for commodities and related investments, analysts said.

“The market tone is suggestive of renewed risk appetite as participants consider China’s latest stimulus measures and their implications for global growth,” ScotiaBank currency strategists wrote in a research note.

Expectations the Bank of Canada would raise key interest rates later this year also buttressed demand for the loonie, and helped lift Canadian yields for a third straight session.

The U.S. dollar was 0.1 per cent lower against its Canadian counterpart at $1.3124, reversing some of its gain on Monday, Reuters data showed.

Oil prices rose on Tuesday as the market shifted focus to the possibility of increased Chinese demand, drawing attention away from trade tensions between that country and the United States.

Brent crude settled 38 cents higher at $73.44 a barrel, after it reached a session high of $74.

U.S. West Texas Intermediate (WTI) was up 63 cents, or nearly 1 per cent, to settle at $68.52. Earlier in the day, WTI reached a high of $69.05.

Reports that China will increase infrastructure spending helped lessen fears that U.S.-China trade tensions will reduce the country’s demand for oil, said Phil Flynn, analyst at Price Futures Group in Chicago.

“That’s going to be very bullish for oil demand,” Flynn said. “Infrastructure spending from China in the past had really jacked up oil demand, and I think that’s adding some outside support for prices.”

After an 8-per-cent decline from multi-year highs, buyers returned to the market, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Conn.

With notable reductions in crude inventories because of strong global growth, the supply-and-demand picture will remain favorable unless there are significant production increases from Russia and Saudi Arabia, McGillian said.

Still, commitments from the countries to increase production limited further gains, as they came amid easing supply disruptions in Libya and decreases in global refiner demand, said Jim Ritterbusch, president of Ritterbusch and Associates.

Market sentiment has been driven by fears that supply could be disrupted by confrontation in the Middle East or that Washington’s trade dispute with major trading partners could dampen global growth.

Reuters and The Associated Press

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 22/05/24 1:47pm EDT.

SymbolName% changeLast
CNR-T
Canadian National Railway Co.
+0.53%173.88
GOOG-Q
Alphabet Cl C
-1.34%177.13
GOOGL-Q
Alphabet Cl A
-1.28%175.58
AMZN-Q
Amazon.com Inc
-0.25%182.69
CP-T
Canadian Pacific Kansas City Ltd
-0.96%109.8

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