Financials, industrials boost S&P to record high

By Sruthi Shankar

REUTERS - The S&P 500 hit a record intraday high on Tuesday, led by gains in financial and industrial stocks after Irma weakened to a tropical depression, but declines in McDonald's and technology stocks weighed on the Dow and Nasdaq.

Irma, which had rampaged through the Caribbean as one of the most powerful Atlantic hurricanes, weakened to a tropical depression, allaying concerns about the severity of its financial impact.

Investors also seemed to shrug off North Korea's rejection of sanctions imposed by the U.N. Security Council and the country's traditionally defiant threat of retaliation against the United States.

"There's a relief factor, at least for the moment, that North Korea situation has gone a little bit quiet, and the fact that the hurricane over the weekend was not as bad as expected," said Dave Donabedian, chief investment officer of CIBC Atlantic Trust Private Wealth Management.

 

Instead, Donabedian said investors seemed to take some cheer from U.S. Treasury Secretary Steve Mnuchin's comments that he was hopeful of a tax reform by the end of 2017, with a "competitive" rate for businesses even if not at the 15-percent rate backed by President Donald Trump.

"The other thing I'd point to is, you've gone from extreme pessimism about any kind of fiscal stimulus package to more coming around to the idea that maybe something will happen late this year or early next year," Donabedian said.

At 11:03 a.m. ET, the Dow Jones Industrial Average was up 42.9 points, or 0.19 percent, at 22,100.27 and the S&P 500 was up 3.36 points, or 0.14 percent, at 2,491.47.

The Nasdaq Composite was up 3.38 points, or 0.05 percent, at 6,435.64.

Eight of the 11 major S&P sectors were higher, led by a 1 percent rise in telecom services index.

Financials rose more than 1 percent, with the six major banks up between 1.2 percent and 2.5 percent.

Apple's shares were flat ahead of the expected launch the 10th anniversary edition of the iPhone, whose sales will also have repercussions on its rivals and many suppliers. The event is to start at 1:00 p.m. ET (1700 GMT).

McDonald's shares fell more than 3 percent on a report that a research firm had raised concerns about the restaurant chain's third-quarter sales.

DowDuPont rose 1.77 percent after the company said it was making changes to a plan of splitting itself into three.

Advancing issues outnumbered decliners on the NYSE by 1,654 to 1,030. On the Nasdaq, 1,610 issues rose and 1,099 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)