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* S&P 500 hits record high
* Microsoft touches all-time high on Pentagon cloud contract
* Tiffany surges on LVMH's $14.5 bln bid
* Spotify jumps on surprise quarterly profit
* Indexes up: Dow 0.66%, S&P 0.62%, Nasdaq 0.65%
(Updates to open)
By Arjun Panchadar
Oct 28 (Reuters) - The benchmark S&P 500 index hit a record
high on Monday as a possible trade deal between the U.S. and
China, and rising bets on a third rate cut by the Federal
Reserve, bolstered investor optimism.
Meanwhile, shares of Microsoft Corp MSFT.O powered the
three main stock indexes. The tech giant's shares touched an
all-time high and were last up 2.6% after it won the Pentagon's
$10 billion cloud computing contract, beating Amazon.com Inc
AMZN.O . Amazon shares dropped nearly 1%. The other two major indexes are less than 1% below their
record levels. 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. This added to Friday's optimism when Washington said it was
"close to finalizing" some parts of a trade agreement with
China. Beijing confirmed on Saturday that "technical
consultations" on some parts of the agreement were basically
completed.
"Markets seem convinced the first deal will get done and
that negotiations are progressing on the next deal," said Edward
Moya, senior market analyst at Oanda.
The news comes as a relief to investors who have been
grappling with the fallout from the trade war, which was
reflected in some of the dismal economic data this month.
This has raised odds for a quarter percentage point cut in
U.S. borrowing costs to 94% from 49% last month. The Fed will
announce its policy decision at the end of its two-day meeting
on Wednesday.
The third-quarter earnings season has managed to ease some
concerns related to impact of the trade tensions on Corporate
America, with over 78% of the 199 S&P 500 companies that have
reported so far surpassing profit expectations.
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 9:56 a.m. ET the S&P 500 .SPX was up 18.64 points, or
0.62%, at 3,041.19. The Dow Jones Industrial Average .DJI was
up 178.09 points, or 0.66%, at 27,136.15 while the Nasdaq
Composite .IXIC was up 53.44 points, or 0.65%, at 8,296.56.
Nine of the 11 major S&P sectors were trading higher, with
the technology sector providing the biggest boost.
Among other stocks, Tiffany & Co TIF.N surged 29.02% after
Louis Vuitton owner LVMH LVMH.PA made a $120 per share offer
to buy the U.S. luxury jeweler. AT&T Inc T.N rose 4.81% 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.
Spotify Technology SA SPOT.N gained 11.29% after the music
streaming company posted a surprise quarterly profit and beat
revenue estimates. Advancing issues outnumbered decliners by a 2.47-to-1 ratio
on the NYSE and a 2.56-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and no new lows,
while the Nasdaq recorded 81 new highs and 16 new lows.