Friday, May 7

S&P 500, Nasdaq hit record highs as U.S.-Iran escalation fears fade

(Reuters) – The S&P 500 and the Nasdaq hit record highs on Wednesday after President Donald Trump said there were no American casualties in the Iranian missile strikes and that Tehran appeared to be standing down, sparking a relief rally in markets.

FILE PHOTO: Traders work at the New York Stock Exchange (NYSE) in New York, U.S., January 2, 2020. REUTERS/Bryan R Smith

Iranian forces fired missiles overnight at military bases housing U.S. troops in Iraq, in response to the U.S. killing of Iranian General Qassem Soleimani, a move that initially sent shivers across global markets and drove U.S. stock futures down over 1%.

However, comments from Iranian foreign minister that the country did not seek an escalation and Trump’s tweet that “All is well!” kept markets in the positive territory.

“The fact that we have this great military and equipment, however, does not mean we have to use it,” Trump said at a White House briefing later in the day.

“The de-escalation nature of the speech is really what the market is focused on,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

“It’s Trump essentially saying that we’re not going to retaliate to the missile attacks last night.”

Trump’s latest comments sent the S&P 500 and the Nasdaq to all-time highs, previously hit on the first trading day of 2020 on hopes of a U.S.-China trade deal.

At 12:01 p.m. ET, the Dow Jones Industrial Average .DJI was up 204.40 points, or 0.72%, at 28,788.08, the S&P 500 .SPX was up 22.02 points, or 0.68%, at 3,259.20 and the Nasdaq Composite .IXIC was up 64.35 points, or 0.71%, at 9,132.94.

The blue-chip Dow was trading just below its all-time high as Boeing Co (BA.N) fell 1.2% after its 737-800 jet belonging to a Ukrainian airline burst into flames shortly after take-off from Tehran, killing all 176 people aboard.

Walgreens Boots Alliance Inc (WBA.O) slid 6.2% as its quarterly profit missed expectations. Shares in rival CVS Health (CVS.N) fell 1.8%.

Lennar Corp (LEN.N) gained 2.4% after the No. 2 U.S. homebuilder beat quarterly profit estimates on the back of lower home prices and mortgage rates.

Adding to the upbeat mood, the ADP National Employment Report showed private payrolls jumped by 202,000 jobs last month, much above the 160,000 rise expected by economists polled by Reuters.

Advancing issues outnumbered decliners for a 1.81-to-1 ratio on the NYSE and a 1.64-to-1 ratio on the Nasdaq.

The S&P index recorded 54 new 52-week highs and no new lows, while the Nasdaq recorded 85 new highs and 9 new lows.

Reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Sriraj Kalluvila, Maju Samuel and Shounak Dasgupta

Our Standards:The Thomson Reuters Trust Principles.

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