U.S. equities and stock exchange traded funds managed to turn higher mid-Thursday as earnings helped support gains, but falling oil prices kept pressure on the energy sector.
Fueling the ongoing strength in the equities market, strong earnings from technology companies helped keep the momentum going.
Additionally, investors continued to digest President Donald Trump’s recently announced tax reform plan, which proposed deep cuts for businesses.
“The market is focused more on growth and earnings now than what is coming out of the administration,” Ryan Caldwell, chief investment officer at Chiron Investment Management, told Reuters. “It is good to see they are looking at taxes, and it’s good to know they are aggressive, but the implementation looks more like an end-of-the-year event.”
Consequently, many market observers are now focused on earnings and market fundamentals as an indicator of future strength, holding a diminished view on potential policy changes.
“At the end of the day, the market is always about earnings and growth,” JJ Kinahan, chief market strategist at TD Ameritrade, told the Wall Street Journal. “If your earnings are good and the economy is performing, that makes up for a lot of other things.”
Meanwhile, losses in energy shares, which fell 1.3% in the S&P 500, kept a lid on market gains as crude oil prices continued their slip below $50 per barrel on concerns over a surplus in petroleum products.
The Energy Select Sector SPDR (NYSEArca: XLE), the largest exchange traded fund dedicated to stocks in the S&P 500, dipped 1.3% Thursday. West Texas Intermediate crude oil futures fell 1.6% to $48.8 per barrel, with the United States Oil Fund (NYSEArca: USO) down 0.6%.
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