NEW YORK (Reuters) - The S&P 500 edged higher and eked out another record closing high on Monday, bolstered by optimism over earnings with heavyweight technology names reporting this week, while caution ahead of a policy meeting by the Federal Reserve kept the market in check.
Shares of Tesla Inc, set to report earnings after the market close on Monday, rose. Other heavyweights including Alphabet Inc, Apple Inc, Amazon.com Inc, Facebook Inc and Microsoft Corp, will report earnings through the week.
The vast majority of second-quarter earnings have handily beaten analysts’ expectations so far, bumping up the already huge projected growth for the second quarter, according to Refinitiv data.
“We continue to see positive surprises, and even with a lot of optimism and increased estimates going into earnings season, we’re still seeing companies exceed those expectations,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, New York.
“As we get into the heart of (the earnings season), we get industrials and more cyclical names, it will be interesting to see not only how much there is in terms of recovery but also is there any impact from some of these issues, meaning inflation, the spike in prices.”
3M is also due to report this week.
A two-day meeting of the Fed starts on Tuesday, and all eyes may be on whether the central bank expresses any new concerns about high inflation when it concludes its gathering on Wednesday.
In June, the Fed indicated it may start raising rates two times in 2023, which was sooner than previously expected.
Unofficially, the Dow Jones Industrial Average rose 83.36 points, or 0.24%, to 35,144.91, the S&P 500 gained 10.43 points, or 0.24%, to 4,422.22 and the Nasdaq Composite added 3.72 points, or 0.03%, to 14,840.71.
Continued optimism about second-quarter earnings has helped offset recent concerns over the market impact of the Delta variant of COVID-19.
Graphic: Chinese stocks under regulatory fire:
U.S.-listed Chinese shares fell after Beijing last week announced new rules on private tutoring and online education firms, the latest in a series of crackdowns on the technology sector that have roiled financial markets.
E-commerce company Alibaba Group and search engine Baidu Inc, two of the largest Chinese stocks listed in the United States, were lower.
Recent losses in Chinese stocks have been steeper than those recorded during the height of the Sino-U.S. trade war in 2018, mainly due to Beijing’s targeting of large technology firms.
Weapons maker Lockheed Martin Corp also fell after a classified aeronautics development program caused the firm to miss profit estimates.
Reporting by Caroline Valetkevitch in New York; Additional reporting by Ambar Warrick in Bengaluru; Editing by Arun Koyyur and Matthew Lewis