Wall Street opened higher on Thursday, helped by increased optimism around the first-quarter earnings season, but oil prices failed to hold on to their gains. With Wall Street near record levels and worries over President Donald Trump’s ability to deliver on his pro-growth promises, investors are hoping first-quarter earnings will be strong enough to justify lofty market valuations.
Of the 57 companies in the S&P 500 that have reported earnings through Wednesday morning, about 75 percent have topped expectations, according to Thomson Reuters data, above the 71 percent average for the past four quarters. Overall, profits of S&P 500 companies are estimated to have risen 10.8 percent in the quarter, the best since 2011.
“We’ve had some strong earnings with more positive surprises than negative, but the overall market trend remains negative because of geopolitical concerns,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
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Mounting tensions between North Korea and the United States and the looming French presidential elections are keeping investors away from making risky bets. A closely watched poll showed Centrist Emmanuel Macron hung on to his lead as favorite to win France’s presidential election in a four-way race that is too close to call.
Brent crude futures were down 6 cents at $52.87 per barrel as bloated inventories weighed.
At 9:34 a.m. ET (1334 GMT) the Dow Jones industrial average was up 48.9 points, or 0.24 percent, at 20,453.39, the S&P 500 was up 6.86 points, or 0.29 percent, at 2,345.03. The Nasdaq Composite was up 29.20 points, or 0.5 percent, at 5,892.23.
Seven of the 11 major S&P sectors were higher, with the financial index’s 0.85 percent rise leading the gainers.
Shares of Philip Morris fell 3.9 percent to $109.85 after the tobacco maker’s first-quarter profit forecast came in below estimates. Verizon Communications was down 2.3 percent at $47.85 as the No. 1 U.S. wireless carrier reported a 20 percent fall in quarterly profit.
American Express was up 2.9 percent at $77.67 after the company’s first-quarter profit fell less than expected. The stock provided the second-biggest boost to the Dow.
Key companies scheduled to report results on Thursday include Dow component Visa and toymaker Mattel.
Advancing issues outnumbered decliners on the NYSE by 1,814 to 722. On the Nasdaq, 1,706 issues rose and 489 fell. The S&P 500 index showed 16 new 52-week highs and one new low, while the Nasdaq recorded 53 new highs and six new lows.
(Reporting by Tanya Agrawal; Editing by Anil D’Silva)