By Yasin Ebrahim
Investing.com – The S&P 500 and Nasdaq hit record highs, as gains in FAANG stocks and an earnings-led surge by Salesforce.com prompted investors to raise their bullish bets on stocks.
The Dow Jones Industrial Average rose 0.30%, or 83 points. The S&P 500 and the Nasdaq Composite rose 1.03% and 1.73% to hit record highs.
Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Netflix (NASDAQ:NFLX) stole the show, with the latter more than 11% higher as investors bet that tech will continue to reign supreme.
Apple (NASDAQ:AAPL) was upgraded by Wedbush to a street-high $600 from $515 on signs of increasing demand for its upcoming slate of 5G-enabled iPhones due later this year.
Facebook (NASDAQ:FB) was up 6% despite warning that changes Apple made to its latest iPhone operating system could impair the social media giant's ability to roll-out in-app advertisements to iPhone users, potentially cutting revenue in its audience network advertising business by more than 50%.
Better-than-expected earnings in tech also lifted sentiment as Salesforce.com Inc (NYSE:CRM) and Hewlett Packard Enterprise Co (NYSE:HPE) reported better-than-expected results late Tuesday.
Salesforce.com surged 26% after raising guidance and reporting blowout quarterly earnings of $1.44 per share, well above the 67 cents a share consensus estimate, led by growth in remote work and e-commerce.
Hewlett Packard Enterprise reported better-than-expected earnings of 32 cents per share and revenue of 6.82 billion, sending its shares more than 3% higher.
Investor sentiment on stocks was also helped by further positive news on a potential coronavirus vaccine.
Drugmaker Moderna (NASDAQ:MRNA) reported that its coronavirus vaccine candidate, mRNA-1273, has shown positive results in a trial of patients aged 56 and older. Its share price climbed by more than 6%.
Positive vaccine news comes as the spread of the virus across the U.S. continues to abate.
Since the beginning of August, weekly average daily cases in the U.S. fell to about 40,000 from over 60,000 new infections, with daily cases falling below 3000 over the past three days, the CDC said.
Energy failed to participate in the broader move higher as oil prices remained flat despite a larger-than-expected weekly draw in U.S. crude stockpiles of 4.7 million barrels.
On the economic front, consensus-topping durable goods orders for July, strengthened investor optimism over the pace of the economic recovery.
U.S. durable goods orders jumped by 11.2% in July, topping economists forecasts for a 4.3% increase.
The biggest single contribution to the headline came from surging auto production, but this does "not recover the lost ground from the spring," Pantheon Macroeconomics said. "This won’t be recovered anytime soon, given the continued depression in fleet auto sales, even though private consumers are buying as many cars and trucks as before the pandemic."