S&P 500 Hits Record High on Robust Merck, Pfizer Earnings

The S&P 500 touched a record high on Oct. 29 as investors cheered strong earnings from big drugmakers Merck and Pfizer, while a disappointing profit from Google parent Alphabet kept the Nasdaq firmly in the red.

Hopes of a U.S.-China trade deal and expectations of another rate cut by the Federal Reserve when it concludes its two-day meeting on Wednesday have kept markets inching higher this week.

Merck & Co. Inc. and Pfizer Inc. both gained about 3 percent after reporting upbeat third-quarter results. The health care sector, which has been the second-worst performer among the 11 major S&P 500 sectors this year, rose 1.36 percent.

“The health care stocks are up after earnings and thats a good sign,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Jersey City, New Jersey.

“Some of those stocks have gotten a little bit beat up due to political risk so there is a lot of room for an upside move.”

Shares of Alphabet Inc., however, slipped 2.1 percent as its quarterly profit missed estimates due to higher costs.

Third-quarter earnings of S&P 500 companies have largely been better than expected, easing some of the concerns over growth which have dogged markets this year, with over 77 percent of the 236 firms to report so far surpassing profit expectations, according to Refinitiv data.

Other marquee names reporting this week include tech and internet heavyweights Apple Inc. and Facebook Inc. as well as oil majors Exxon Mobil Corp. and Chevron Corp.

Stocks briefly pulled back from session highs after a U.S. administration official told Reuters that Washington and Beijing are continuing to work on an interim trade agreement, but it may not be completed in time for the U.S. and Chinese leaders to sign it in Chile next month.

All eyes are now on the Fed meeting, where the central bank is widely expected to deliver a quarter percentage point interest rate cut for the third time this year.

At noon on Oct. 29, the Dow Jones Industrial Average was up 30.49 points, or 0.11 percent, at 27,121.21 and the S&P 500 was up 5.23 points, or 0.17 percent, at 3,044.65. The Nasdaq Composite was down 23.24 points, or 0.28 percent, at 8,302.75.

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