US open: Nasdaq hits 6,000 mark for the first time ever

The Nasdaq hit the 6,000 mark for the first time on Tuesday on the back of recent better-than expected corporate earnings and the so called ‘Trump rally’.

On opening the Nasdaq opened 0.5% higher to 6,022 and not to be outdone, the Dow rose 1.1% to 20,955 following better-than-expected quarterly earnings, while the S&P was up 0.7% to 2,389 as financial stocks gained.

At 1552 BST, Dow Jones Industrial Average gained 1.09% to 20,990.62, the S&P 500 rose 0.55% to 2,387.30, and the Nasdaq added 0.52% to 6,014.77.

The Nasdaq is technology heavy with giants Apple, Amazon and Facebook listed. The last time the index rallied was during the dot com bubble in the late 1990s and early 2000s. However, the bubble burst and the Nasdaq did not return to the 5,000 mark again until March 2015.

This milestone for the Nasdaq builds on the 20,000 mark the Dow surpassed on 25 January.

Lately, global markets had run higher on the Trump rally as US President Donald Trump promised to spend $1trn on infrastructure, relax regulations and cut taxes, as well as with easing geopolitical risks with the expected election of centrist Emmanuel Macron as the next president of France.

Since Trump’s electoral victory last November, the Nasdaq has increased 15.7%, more than the Dow with 14.3% and S&P 500 with 11.5%.

Investors were also looking ahead to a possible announcement by Trump on Wednesday to outline his plans for tax reform such as cutting corporation tax by 15%.

Neil Wilson, senior market analyst at ETX Capital, said: “Tech is leading again as the Nasdaq composite continues its outperformance against the other major indices in 2017. Amazon, Apple, Facebook, Google, Microsoft, which combined account for something a tenth of US market cap and keep notching up one record high after the next, are in charge. All are at or close to all-time highs. They’re the big beneficiaries of proposed tax reform so we’re seeing continued strength in these giants.

“Whenever we hit these milestones we always ask whether stocks are getting too expensive. With the Nasdaq hitting all-time highs thoughts instantly return to the dotcom bubble. But we are a long way off the kind of multiples seen back then. That should offer some comfort. Meanwhile the Shiller PE Ratio for the S&P 500 is still well short of the level it hit at that time. Approaching 30, it’s very high historically but has a lot further to run to breach the 44 level it scaled before it all fell apart at the start of the noughties. For now it’s time to party like it’s 1999.”

Meanwhile, West Texas Intermediate was down 0.2% to $49.13 per barrel and Brent crude was flat at $51.57.

In currency markets, the dollar was down 0.18% against the dollar to 0.7801, fell 0.52% versus the euro to 0.9153 and rose 0.95% against the yen to 110.81.

There were a slew of earnings reported, with McDonald’s 4.24% higher after the fast food giant’s first-quarter earnings beat forecasts, while Caterpillar gained 6.55% after the construction equipment manufacturer raised its full-year revenue guidance and also reported better-than-expected results.

DuPont was up 3.02% after beating expectations and Coca-Cola rose 0.18% following a first quarter fall in earnings and revenue.

Biogen gained 4.67% after it reported a 7% rise in earnings, and Rite Aid added 8.84% after topping earnings expectations.

Lockheed Martin was down 2.2% after the US contractor trimmed its outlook it after it missed revenue forecasts, while, Eli Lilly & Co fell 2.76% after the drugmaker swung to a first-quarter loss.

In other corporate news, Straight Path Communications surged 11.37% after announcing that AT&T has five days to match a higher buyout bid it received.

AdvancePierre Foods Holdings climbed 9.74% after Tyson Foods said that it will by the company for $4.2bn.

On the data front, the Conference Board's consumer confidence index fell to 120.3 in April from 124.9 the month earlier and slightly below the consensus forecast of 122.5.

The headline index was depressed by a 5.7 point drop in the expectations index and a 3.3 point dip in the current conditions number. Inflation expectations were unchanged at 4.7% over the next year.

Separately, new US home sales rose to 621,000 in March from 587,000 in February and above the 584,000 consensus forecast. The net revision was up by 43,000.