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* S&P 500 at all-time high, Nasdaq flirts with record
* Microsoft top boost to all 3 indexes on Pentagon contract
* Tiffany surges on LVMH's $14.5 bln bid
* Spotify jumps after surprise quarterly profit
* Indexes up: Dow 0.40%, S&P 0.51%, Nasdaq 0.82%
(Adds comments, updates market action)
By Arjun Panchadar
Oct 28 (Reuters) - Technology stocks pushed the benchmark
S&P 500 index to an all-time high and the Nasdaq close to its
record level, as a possible U.S.-China trade deal and rising
bets on a third rate cut by the Federal Reserve fueled optimism.
Shares of Microsoft Corp MSFT.O gained more than 2% and
provided the biggest boost to all three main indexes after the
technology giant won the Pentagon's $10 billion cloud computing
contract, beating Amazon.com Inc AMZN.O . The S&P 500 rose as much as 0.7% to 3,044.08, breaching the
record level hit in July, while the Nasdaq was less than 0.5%
below its all-time high. The Dow Jones Industrial Average was
more than 1% away from its life high.
"We are going to maybe trade up a little bit higher in the
short term and (pull back) after the earnings season and the
rate cut," said Robert Pavlik, senior portfolio manager at
SlateStone Wealth LLC in New York.
President Donald Trump said on Monday he expected to sign a
significant part of the trade deal with China ahead of schedule
but did not elaborate on the timing. That added to Friday's optimism when Washington said it was
"close to finalizing" some parts of a trade agreement with
China. The news comes as a relief to investors who have been
reeling from the impact of the trade war and its fallout on the
domestic economy.
Adding to the upbeat mood, the Fed is expected to widely cut
interest rates at its two-day policy meeting, which ends on
Wednesday.
The odds for a quarter percentage point cut in U.S.
borrowing costs have jumped to 94% from 49% last month,
according to CME Group's FedWatch tool.
"One of the reasons they are cutting interest rates is not
because they are trying to get ahead of a slowdown but because
they are worried about the impact of the trade and tariff
issues," Pavlik said.
The third-quarter earnings season has managed to ease some
concerns related to the impact of the trade tensions on
Corporate America, with over 78% of the 204 S&P 500 companies
that have reported so far surpassing profit expectations,
according to Refinitiv data.
Earnings for S&P 500 companies are expected to fall 2%, but
excluding the energy sector, they are forecast to rise 0.5%.
Investors are now waiting for earnings from heavyweights
this week, including Apple Inc AAPL.O , Alphabet Inc GOOGL.O
and Merck & Co Inc MRK.N .
At 11:19 a.m., ET the Dow Jones Industrial Average .DJI
was up 107.46 points, or 0.40%, at 27,065.52, the S&P 500 .SPX
was up 15.54 points, or 0.51%, at 3,038.09 and the Nasdaq
Composite .IXIC was up 67.92 points, or 0.82%, at 8,311.04.
Among other stocks, AT&T Inc T.N rose about 5% after the
U.S. wireless carrier said it would add two new board members
and consider selling off up to $10 billion worth of non-core
businesses next year. Tiffany & Co TIF.N surged about 31% after Louis Vuitton
owner LVMH LVMH.PA made a $120 per share offer to buy the U.S.
luxury jeweler. Spotify Technology SA SPOT.N jumped about 16% after the
music streaming company posted a surprise quarterly profit and
beat revenue estimates. Advancing issues outnumbered decliners by a 1.54-to-1 ratio
on the NYSE and a 2.17-to-1 ratio on the Nasdaq.
The S&P index recorded 37 new 52-week highs and no new lows,
while the Nasdaq recorded 96 new highs and 26 new lows.