U.S. equities and stock exchange traded funds were largely stuck in sideways action, but the benchmark Dow Jones Industrial Average and Nasdaq Composite still managed to break into record highs.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were flat Tuesday.
Meanwhile, the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.2% and PowerShares QQQ (NasdaqGM: QQQ) was 0.4% higher.
As the U.S. pushes toward the ninth year of the equity market rally, investors have been relieved to find that strong earnings growth is helping to support the elevated stock valuations – the S&P 500 is trading at 17.7 times forward 12-month earnings, compared to the 10-year median of 14.7 times, Reuters reports.
Fourth quarter earnings are projected to have increased 8.2%, the best in nine quarters.
“We’ve been getting some back and forth between the new administration’s business-friendly policies versus the disruptions economically and politically from the immigration and trade-related issues,” Jason Pride, director of investment strategy at Glenmede, told Reuters. “However, at the end of the day, the expansion is continuing, the economy and earnings are growing and that should support equities.”