S&P 500 climbs toward record high, earnings in focus

(Reuters) - The S&P 500 climbed toward a record high on Monday, supported by expectations of lower interest rates, while investors awaited quarterly earnings from marquee companies Facebook, Alphabet and Amazon later this week.

Facebook Inc FB.O rallied 2.0% ahead of its report due out after the bell on Wednesday, while Inc AMZN.O and Google-parent Alphabet Inc GOOGL.O were each up more than 0.7% ahead of their reports on Thursday.

Investors’ reactions to the reports of these top-tier growth companies could affect broader market sentiment, with the S&P 500 about 1% below its July 15 record high close.

“How is that going to affect my other tech holdings and the market overall? That is more worrying than my actual investment in Alphabet,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The technology index .SPLRCT jumped 1.2%, the most among the S&P sectors, while the Philadelphia chip index .SOX surged almost 2%. Apple added 2.3% to $207.22 after Morgan Stanley raised its price target to $247 from $231.

Shares of Boeing Co BA.N fell 1.0% and pressured the blue-chip Dow index .DJI after ratings agency Fitch revised its outlook on the planemaker to "negative" from "stable," while the tech-heavy Nasdaq was lifted by chipmakers.

The European Central Bank meets on Thursday and money markets are pricing in a more than 50% chance of a 10-basis-point cut in interest rates. Federal Reserve officials are set to meet just days later, and are widely expected to lower rates by at least 25 basis points.

Hopes of an interest rate cut have helped Wall Street’s main indexes hit record levels this month, recovering from a slump in May caused by a sudden escalation of U.S.-China trade tensions.

About 30% of S&P 500 companies are set to report second-quarter results this week, with overall profits now estimated to rise about 1%, according to Refinitiv IBES data.

Chip stocks gained on news that White House economic adviser Larry Kudlow will host a meeting with executives of semiconductor and software companies on Monday to discuss a U.S. ban on sales to China’s Huawei Technologies.

The Dow Jones Industrial Average .DJI rose 0.07% to end at 27,172.04 points, while the S&P 500 .SPX gained 0.28% to 2,985.02. The Nasdaq Composite .IXIC added 0.71% to 8,204.14.

Second-quarter earnings have been mixed so far, with major banks raising concerns about profit growth in a low-interest-rate environment. Microsoft Corp MSFT.O and International Business Machines IBM.N, on the other hand, have reported better-than-expected earnings.

Halliburton Co HAL.N surged 9.1%, the most among S&P 500 companies, after the oilfield services provider's second-quarter profit beat analysts' estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored decliners.

The S&P 500 posted eight new 52-week highs and five new lows; the Nasdaq Composite recorded 47 new highs and 118 new lows.

Volume on U.S. exchanges was 5.1 billion shares, compared to the 6.4 billion average for the full session over the last 20 trading days.

Reporting by Noel Randewich; Additional reporting by Amy Caren Daniel and Karina Dsouza in Bengaluru; Editing by Chris Reese and Leslie Adler