• S&P 500, Dow Jones show gains
  • Nasdaq closes slightly lower
  • Most quarterly results show stronger-than-expected profits

Stock markets in the United States ended mostly higher yesterday (18 July), with anecdotal reports of business conditions in the 12 Fed districts showing a positive image of the country’s economy.

The S&P 500 ended 0.2% higher at 2,815.62, driven predominantly by financial shares. The Dow Jones Industrial Average closed 0.3% higher at 25,199.29. The Nasdaq Composite Index, meanwhile, closed 0.67 points lower at 7,854.44.

This came after the Fed’s Beige Book showed a rapidly growing economy but one that can’t grow significantly faster because of increasing raw material costs and insufficient skilled labor.

The anecdotal reports of business conditions in the 12 Fed districts revealed “modest” growth in 11 of them, with St. Louis reporting marginal growth.

The most recent statistics show that close to 90% of the firms that have issued quarterly results so far have exceeded profit forecasts.

Earnings continued to play a role, as did Fed Chairperson Jerome Powell’s support for another rate increase this year. He added that he saw few signs of an impending recession.

Earlier in the day, President Donald Trump’s Economic Adviser Larry Kudlow said at a CNBC event that more growth-boosting measures might be coming soon.

The president of Novato-based Winans Investments Ken Winans said: “It all still comes down to earnings and interest rates and so far we’re good on earnings, and we know from Jerome Powell that the interest-rate picture is pretty predictable.”

Prudential Financial Chief Market Strategist Quincy Krosby said that, so far, earnings reports have been strong. He added that although yesterday’s housing stats came in below expectations, economic data has shown an uptrend that is supporting markets.

June’s housing starts were 3% below last June’s figure.

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