US stocks reach new highs after technology shares surge
Stocks have taken a further step into record territory after several companies reported profits that were stronger than expected.
Technology stocks led the way following an encouraging report from Microsoft.
Both the Standard & Poor's 500 index and Dow Jones industrial average set all-time highs, and the Dow marked its ninth consecutive day of gains.
It is the longest winning streak for the measure of blue-chip stocks since 2013, and it has been a decidedly slow-and-steady one. All but one of those days had a gain of less than 1%.
"The problem is: Where do we go from here?" asked Randy Frederick, managing director of trading and derivatives at Charles Schwab.
He added that he has "the tendency to believe the upside is somewhat limited", in part because stock prices have been rising faster than corporate earnings in recent years.
The Standard & Poor's 500 index rose 9.24 points, or 0.4%, to close at 2173.02.
The Dow Jones industrial average rose 36.02, or 0.2%, to 18595.03.
The Nasdaq composite rose 53.56, or 1.1%, to 5089.93.
Companies are in the middle of telling investors how much they earned in the spring, and analysts are forecasting yet another decline from year-ago levels.
The low expectations have made it easier for companies to come in above forecasts.
Microsoft surged to one of the biggest increases in the S&P 500 in the first day of trading after it reported quarterly results that easily beat analysts' expectations.
The technology giant's stock jumped by 5.3% to 55.91 US dollars (£43.32) after it said momentum in its cloud-computing business helped it to return to a profit in its fiscal fourth quarter.
That drove the technology sector up 1.4%, much more than the rest of the market.
The best-performing stock in the S&P 500 was Cintas, which jumped 9.7% to 106.85 dollars (£80.88).
The company, which provides uniforms and products for offices, also reported quarterly earnings above analysts' expectations.
So far this reporting season, earnings for nearly two out of three companies have come in above analysts' expectations, according to S&P Global Markets Intelligence.
That is what usually happens, because analysts tend to lower their earnings forecasts for companies as each reporting season approaches.
Several reports on the US economy have also come in better than expected in recent weeks, which has helped drive the run for stocks to a record.
Markets have become calm enough that the VIX, an index that measures investors' expectations of future volatility in the stock market, fell 2.2% and is near its lowest level since 2014.
The S&P 500 has been on a steady ride higher since setting a record on July 1, with no days where it has swung by 1% during that span.
That is a sharp turnaround from the end of June, when the S&P 500 swung at least that much in six straight days, with one fear-inducing drop of 3.6%.
The market's calm has also meant less demand for gold and Treasurys, traditional go-to investments during periods of fear.
The price of gold fell by 13 dollars to 1,319.30 dollars (£998.87) per ounce. The yield on the 10-year Treasury note, which moves in the opposite direction of its price, rose to 1.58% from 1.56% late on Tuesday.
The weakest areas of the stock market on Tuesday were sectors that tend to be big dividend payers, such as utilities, which lost 0.5%.
These types of stocks had led the market for much of 2016 as investors sought alternatives to low-yielding bonds.
European markets were mostly higher, while Asia's day was mixed. Germany's DAX rose 1.6% after Volkswagen reported earnings that were better than analysts were expecting.
France's CAC 40 climbed 1.1%, and Japan's Nikkei 225 index dipped 0.2%.