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* Tesla hits record high on Hertz order, PT raise
* PayPal jumps after saying it not pursuing Pinterest buy
* Facebook set to kick off mega-cap earnings
* Dow up 0.25%, S&P 500 up 0.55%, Nasdaq up 0.98% (Updates to midafternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Oct 25 (Reuters) – The Dow Industrials and S&P 500 hit fresh record highs on Monday, as earnings season kicked in to high gear in one of the heaviest reporting weeks of the quarter with bellwethers in multiple sectors poised to announce results.
While the Dow and S&P hit new highs, the Nasdaq outperformed on the day, buoyed by gains in Tesla and PayPal.
Tesla Inc jumped 11.56% to its own new record of $1,019.37 and breached $1 trillion in market capitalization, after car rental firm Hertz placed an order for 100,000 Tesla cars, while Morgan Stanley raised its price target on the stock to $1,200 from $900 per share.
Tesla, which has risen in nine of the past ten sessions and is up more than 28% for the month, provided the biggest boost to the S&P 500 and the Nasdaq. Also helping to lift the two indexes was PayPal Inc, which gained 3.76% after the payments company scrapped plans to buy the digital pinboard site Pinterest Inc for as much as $45 billion. Shares of Pinterest slumped 13.01%.
“(Tesla) is moving weirdly with energy but also renewables … people finally figured out that if natural gas is at the equivalent of $180 a barrel that is probably good for renewables,” said Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York.
“Also, it looks like we are going to get the Build Back Better law and infrastructure with a lot of tax credits for renewables, so that is positive.”
U.S. President Joe Biden on Monday held out hope for an agreement on his major spending plans before attending a climate summit in Scotland, while the White House said Democratic negotiators were closing in on a deal.
The Dow Jones Industrial Average rose 88.21 points, or 0.25%, to 35,765.23, the S&P 500 gained 24.99 points, or 0.55%, to 4,569.89 and the Nasdaq Composite added 147.40 points, or 0.98%, to 15,237.60.
Nine of the 11 major S&P sectors advanced, with energy and consumer discretionary shares the best performing, with energy names getting a boost from another rise in oil prices to multi-year highs on tight supply.
Shares of Facebook Inc were up 0.31% ahead of its quarterly results due after market close. Investors fear that like Snap Inc, the social media giant’s ad revenue too could face the brunt of Apple Inc’s privacy changes.
Other mega-cap names scheduled to report this week include Apple, Microsoft Corp and Google parent Alphabet Inc .
This week, 165 components of the S&P 500 are expected to post quarterly results, according to Refinitiv data. Analysts expect earnings at S&P 500 companies to grow 34.8% year-on-year for the third quarter.
Investors are also assessing how companies are navigating supply-chain bottlenecks, labor shortages and inflationary pressures to sustain growth. Of the 119 companies in the S&P 500 that have reported earnings through Monday morning, 83.2% have topped analysts’ expectations.
“Earnings have been good so far, there is always positive vibes in earnings because you have warnings before it starts of course. But for some supply-chain problems, generally the economy was strong so people were positioning ahead of earnings,” said Hatfield.
Shares of Kimberley-Clark lost 2.83% after the Huggies diaper maker cut its 2021 profit outlook due to higher input cost inflation.
Advancing issues outnumbered declining ones on the NYSE by a 2.01-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored advancers.
The S&P 500 posted 77 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 150 new highs and 80 new lows. (Reporting by Chuck Mikolajczak in New York Editing by Arun Koyyur and Matthew Lewis)