U.S. stock-index gauges on Wednesday carved out fresh all-time highs, with the Dow joining the S&P 500 and Nasdaq at records.
Better-than-expected results from Morgan Stanley helped to reaffirm optimism about the current economy and earnings season—factors crucial to supporting current levels considered lofty.
The Dow Jones Industrial Average DJIA, +0.31% rose 66.02 points, or 0.3%, to close at a record of 21,640.75, led higher by shares of DuPont DD, +1.61% and Boeing Co. BA, +1.27% On the downside, tech giantInternational Business Machines Corp. shares IBM, -4.20% fell 4.2% after its results, limiting the Dow’s advance.
The S&P 500 index SPX, +0.54% rose 13.22 points, or 0.5%, to an all-time high at 2,473.83, with all of the 11 primary S&P 500 sectors higher on the day, led by gains in energy and materials stocks. Both the S&P 500 and the Nasdaq ended Tuesday at records. A 0.5% gain in the technology sector, the most heavily weighted sector in the broad-market gauge, did much of the heavy lifting, closing at its highest level of 992.29, surpassing the level of 988.49 set on March 27, 2000 during the height of the dot-com boom, according to WSJ Market Data Group.
The tech-heavy Nasdaq Composite Index COMP, +0.64% rose 40.74 points, or 0.6%, to set a fresh high at 6,385.04—marking its ninth session of consecutive gains and its 40th all-time closing high of 2017.
Small-capitalization indexes also ended at records, with the Russell 1000 RUI, +0.57% closing up 0.6% at 1,371.00, and the Russell 2000 RUT, +0.99% ending with a 1% gain at an all-time closing high at 1,441.77.
The Russells, the Dow, S&P 500, and the Nasdaq Composite haven’t all wrapped at records on the same day since March 1.
Financials were among the most heavily traded groups, with Morgan Stanley MS, +3.28% ending up 3.3% after it reported earnings and revenue that topped expectations. Wednesday’s trading volume was at 17.5 million shares, above the 90-day daily average of 10.1 million shares.
“Corporate earnings have been fantastic this quarter, which is shaping up to be one of the best we’ve had in a long time,” said John Bailer, senior portfolio manager at the Boston Company, who added that financial stocks were “one area we’re very bullish on. we’ve been very pleased with their earnings reports.” Market participants see financial companies as the wheels that will help power any further economic growth, with some arguing that lenders need to be in a position to replace highflying sectors, like technology, to sustain a market that is in its ninth year of a bull run.
Although the early readings of corporate results are upbeat, market participants say it may be too soon to declare victory. Large capitalization companies and Dow components, Microsoft Corp. MSFT, +0.76% and General Electric Co. GE, +0.19% are on deck, said Quincy Krosby, chief market strategist, at Prudential Financial.
“Those ought to give us a better perspective on demand, domestically and globally, with revenue growth,” she said. So far, with mixed hard economic data and repeated records without a significant pullback of at least 5% make the market prime for a significant pullback, with earnings outperformance remaining a main factors buoying markets, Krosby said.
In recent economic news, a report on housing starts for June came in at a 1.22 million seasonally adjusted annual rate, a faster pace than had been expected. Wall Street has been heartened by that so-called hard positive data (as opposed to economic surveys), but it’s also mindful of data like Monday’s cooling of the New York Fed’s manufacturing index that could undermine confidence.
So far, the market has been enjoying what some describe as a Goldilocks environment, where sluggish consumer prices and inflation and weak data are threatening to keep the Federal Reserve from lifting borrowing costs too quickly, which has helped to support equity prices and Treasurys TMUBMUSD10Y, +0.47% Meanwhile, the labor-market picture has remained healthy enough to provide comfort to market bulls.
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Other markets: Oil futures CLQ7, +1.49% settled up 1.6% at $47.12 following a decline in U.S. inventories. European stocks SXXP, +0.77% finished higher, while most Asian markets closed with gains. Gold futures GCQ7, -0.08% rose fractionally to settle at $1,242.00 an ounce while a key dollar index DXY, +0.16% rose less than 0.1%.
Other movers: Shares in Vertex Pharmaceuticals Inc. VRTX, +20.83% soared 21% to close at an all-time high of $159.76 a day after the drug company late Tuesday announced positive results from clinical studies of its cystic fibrosis treatments.
Shares in media companies Discovery Communications Inc. DISCA, +4.34% and Scripps Networks Interactive Inc. SNI, +14.73% jumped on The Wall Street Journal report that they might merge. Discovery shares finished up 4.3% higher while Scripps added nearly 15%.
In other deal news, spices seller McCormick & Co. MKC, -5.22% said late Tuesday it has agreed to acquireReckitt Benckiser Group PLC’s RB., +1.60% food division, which includes French’s mustard, for $4.2 billion. Shares of McCormick fell 5.3%.
—Victor Reklaitis in London contributed to this article