S&P 500 at record high; investors await fresh earnings

(Reuters) – The S&P 500 and the Nasdaq hit record highs on Monday after data showed U.S. consumer spending surged in March, but gains in shares remained muted as investors waited for a fresh batch of earnings reports.

Hopes of a trade resolution and dovish Federal Reserve this year has been powering the benchmark index, which crossed its record high of 2,940.91 hit on Sept. 21 for the first time during the session.

A Commerce Department report showed domestic consumer spending rose by the most in more than 9-1/2 years in March, but price pressures remained muted.

The core personal consumption expenditures price index, which excludes the volatile food and energy components and is the Federal Reserve’s preferred inflation measure, remained steady at 0.1% in March.

“We are coming off a weak patch in the consumer sector, so you have to take the data with a grain of salt, the sector was hit by the partial government shutdown, so some of this strength is a rebound from that,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“There’s a little bit of caution, we’ve got a lot of information coming down the pipe this week, especially the Fed meeting.”

The Federal Open Market Committee will announce its interest rate decision at the end of a two-day meeting, starting Tuesday.

Interest-rate sensitive financials rose 1.02%, the most among the 11 major sectors.

In yet another busy week for earnings, about 160 S&P 500 companies, including Google-parent Alphabet Inc and Apple Inc, are due to report their quarterly reports.

Analysts now expect profits of S&P 500 companies to fall 0.2%, a sharp improvement from a 2% fall estimated at the beginning of the month, according to Refinitiv data.

As trade talks enter their last leg, U.S. negotiators head to China on Tuesday to try to hammer out details to end the protracted tariff spat between the two countries.

At 9:52 a.m. ET the Dow Jones Industrial Average was down 8.42 points, or 0.03%, at 26,534.91, the S&P 500 was up 2.55 points, or 0.09%, at 2,942.43 and the Nasdaq Composite was up 1.67 points, or 0.02%, at 8,148.07.

The healthcare sector fell 0.37%, weighing the most on markets, amid ongoing concerns of potential regulatory changes to the healthcare policy.

Boeing Co dipped 0.3%. Chief Executive Officer Dennis Muilenburg will meet Boeing shareholders for the first time on Monday since two fatal crashes that led to the 737 MAX’s grounding worldwide.

Advancing issues outnumbered decliners by a 1.58-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and no new low, while the Nasdaq recorded 49 new highs and nine new lows.