S&P 500, Nasdaq eclipse record Closing Levels

U.S. stocks erased morning losses and turned to trade higher Thursday, while modest gains sent the main indexes to record levels.

The Nasdaq Composite COMP, +0.62% is trading above its record close reached on March 10, 2000. The tech-heavy index is up about 24 points, or 0.5%, at 5,059.

The S&P 500 SPX, +0.44% was up 9 points, or 0.4%, to 2,117.82, also above the record closing level reached on March 2. The Dow Jones Industrial Average DJIA, +0.39% added 73.40 points, or 0.4%, to 18,111.

The turn higher for stocks come as investors weigh a cascade of mixed earnings reports and weaker-than-forecast economic reports.

Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research, said today’s gains are due to a combination of bullish factors: higher oil prices, weakening dollar and very low volatility. “There is also a seasonal bias, as second half of April tends to be bullish,” he noted.

Indeed, energy, utilities and telecommunications stocks were among the biggest gainers in the S&P 500, while consumer staples was the only sector, out of 10, showing losses.

As for the softness that has been the case with some earnings reports, Kim Caughey Forrest, senior analyst at Fort Pitt Capital, said expectations going into the earnings season may not have been low enough.

“Some companies are beating expectations by a narrow margin, but even the ones who are missing estimates are not punished as much because of low-interest-rate environment,” Forrest said suggesting that companies’ continued ability to service their debt is covering up their poor performance.

Data: Sales of new single-family homes tumbled 11.4% to an annual rate of 481,000 in March, pulling back from a seven-year high reached a month earlier and hitting the slowest pace since November, according to government data released Thursday. However, economists caution that the large margin of error make single-month readings less reliable.

The number of people who applied for regular state unemployment-insurance benefits ticked up 1,000 to 295,000 in the week that ended April 18, signaling a low level of layoffs, according to government data released Thursday.

Markit’s preliminary report on the manufacturing purchasing managers index for April fell to 54.2 in April from 55.7 in March. Flash PMIs out of Europe released earlier on Thursday showed growth weakened at the start of the second quarter.

Earnings: On an exceptionally busy day for earnings, shares of eBay Inc. EBAY, +3.33% jumped 3.5% after earnings showed its PayPal unit brought more revenue that its core marketplace division.

General Motors GM, -3.57% earnings disappointed, hurt by stronger currency and weaker overseas performance. Shares fell 3.8%, making it the top decliner on the S&P 500.

Caterpillar Inc. CAT, +0.49% posted much better-than-expected earnings and lifted its full-year outlook. Shares initially rose as much 2%, but at last check were down 0.8%.

Dunkin’ Brands Group Inc. DNKN, +8.26% reported first-quarter earnings above analyst forecasts and boosted its 2015 outlook, sending the shares up 7%.

Tech giants fill out the results docket after the market closes. Google Inc. GOOGL, +1.66% is forecast to post first-quarter earnings of $6.61 a share, while Microsoft Corp. MSFT, +1.28% is expected to report earnings of 51 cents a share in the first quarter.

Amazon.com Inc. AMZN, -0.25% is likely to post a loss of 16 cents a share in the first quarter.

Movers and shakers: Qualcomm Inc. QCOM, -0.83% lost 2.4% after the chip maker late Wednesday reported a slump in second-quarter earnings.

AT&T Inc. T, +3.21% rose 2.7% on a slightly better-than-expected earnings report issued on Wednesday.

Other markets: European stocks traded mostly lower after the disappointing PMIs. Investors are also closely monitoring news about Greece’s reform talks ahead of a key meeting of eurozone finance ministers on Friday. Greek Prime Minister Alexis Tsipras is due to meet German Chancellor Angela Merkel in Brussels on Thursday.

Asian markets closed mixed, while metals traded higher. Oil prices CLM5, +2.74% rose and the ICE dollar index DXY, -0.88% was flat around 97.96.

Source: MarketWatch