(Reuters) – Technology and consumer discretionary stocks pushed Wall Street higher on Tuesday, as upbeat results from Estée Lauder and Ralph Lauren fueled earnings optimism, ahead of the highly awaited State of the Union address by President Donald Trump.
Leading gains on the S&P 500 was cosmetics maker Estée Lauder Cos Inc which jumped 13.1 percent, followed by luxury fashion group Ralph Lauren Corp up 10.4 percent, after both their quarterly reports exceeded expectations.
Following a turbulent end to 2018, U.S. stocks have had a stellar run this year with the benchmark S&P 500 and blue-chip Dow Industrials up about 9 percent, and the tech-heavy Nasdaq rising 11.4 percent.
The S&P 500 rose for the fifth straight session helped by a recent dovish stance from the Federal Reserve, on hopes of a trade deal between the United States and China and a largely positive fourth-quarter earnings season.
About 71 percent of the S&P 500 companies that have reported earnings have topped estimates. While expectations for fourth-quarter earnings growth are 15.8 percent, estimates for the first-quarter are much lower at 0.4 percent, according to IBES data from Refinitiv.
Alphabet Inc wrapped up FAANG earnings by posting better-than-expected quarterly revenue and profit. However, worries about sharply higher spending, sent its shares down 1.4 percent.
Google parent’s shares were however the only FAANG stock in the red. A 2.0 percent rise in Apple Inc boosted the technology index while Amazon.com Inc’s rise of 1.6 percent pushed the consumer discretionary sector higher.
“Some of the optimism has to do with earnings and some of it might be ahead of the State of the Union address tonight in which Trump is expected to talk in unity, rather than divisiveness over his border wall,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“I’m not sure if that’s going to be the case but the market seems to be pretty optimistic.”
Trump is set to challenge Democrats to approve funding for his long-sought border wall before the Congress at his State of the Union speech due at 09:00 p.m. ET (0200 GMT Wednesday).
The President has contemplated declaring a national emergency as the Congress wasn’t moving towards a deal to fund building a wall along the U.S.-Mexico border, but a source close to Trump said the President was not expected to take that step.
At 11:19 a.m. ET the Dow Jones Industrial Average was up 146.37 points, or 0.58 percent, at 25,385.74, the S&P 500 was up 9.00 points, or 0.33 percent, at 2,733.87 and the Nasdaq Composite was up 47.37 points, or 0.64 percent, at 7,394.91.
However not all earnings were positive. Church & Dwight Co Inc tumbled 8 percent after the household products maker reported a quarterly profit below estimates.
Advancing issues outnumbered decliners for a 1.79-to-1 ratio on the NYSE and a 1.73-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new lows, while the Nasdaq recorded 47 new highs and nine new lows.
(Reporting by Medha Singh in Bengaluru; additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta)