Wall Street gains buoy stocks in light May Day trading; oil falls

Mon May 1, 2017 5:10pm EDT
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By Rodrigo Campos

NEW YORK (Reuters) - Shares of the largest U.S. companies hit record highs on Monday, lifting Wall Street and a gauge of key world equity indexes, while data on U.S. drilling and output kept downward pressure on oil prices.

Global trading was light, with some markets in Europe and Latin America closed for the May Day holiday, while Japan was open overnight during a shortened trading week.

Data showed U.S. manufacturing activity slowed in April while consumer spending was unchanged in March and a key inflation measure recorded its first monthly drop since 2001. Despite the soft data, traders continued to see a 7-in-10 chance that the Federal Reserve will hike interest rates in June.

On Wall Street, Apple and other large technology companies led the way, sending the Nasdaq Composite to a record high. Apple is due to report its earnings on Tuesday, while Facebook will report on Wednesday.

So far in this earnings season, reported and expected profits at S&P 500 companies are estimated to have risen 13.6 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.

"This is shaping up to be the strongest earnings season in several years," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"That has kind of got people gravitating back to equities and gravitating to the equities that are doing well."

Shares of the largest five U.S. companies by market capitalization, Apple (AAPL.O: Quote), Alphabet (GOOGL.O: Quote), Microsoft (MSFT.O: Quote), Amazon (AMZN.O: Quote) and Facebook (FB.O: Quote) hit intraday or closing highs - or both - on Monday.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017. REUTERS/Brendan McDermid