S&P 500, Nasdaq higher after strong factory data; Amex, Honeywell results hit Dow

The S&P 500 and the Nasdaq indexes edged higher on Friday after a rise in factory activity in April supported bets of swifter economic recovery, while a fall in shares of American Express and Honeywell kept the blue-chip Dow under check.

Data firm IHS Markit said its flash US manufacturing PMI increased to 60.6 in the first half of this month, the highest reading since the series started in May 2007.

Eight out of the 11 major S&P 500 sectors traded higher in the first half hour of trading, with technology and energy leading gains. Defensive utilities and consumer staples were among top decliners.

Earnings on the day were lackluster, with American Express Co sliding 3.4% after reporting a slump in credit spending and lower quarterly revenue.

Honeywell International fell 2.7% after it missed revenue estimates for its aerospace division, its biggest business segment.

Wall Street's main indexes sank nearly 1% on Thursday following reports of US President Joe Biden's plans to raise taxes on the wealthiest Americans, including the largest-ever increase in levies on investment gains.

"Yesterday was a knee-jerk reaction to the proposal. Right now, there's nothing definitive on the part of administration," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

"The focus is still on whether or not this market is in the early stage of correction."

The benchmark S&P 500 and the Dow Jones Industrial Average are on course for weekly declines after four straight weeks of gains as the latest worries over tax hikes and a resurgence in global coronavirus cases dulled sentiment.

Speedy vaccination rollouts and trillions in dollars of economic stimulus helped the S&P 500 and the Dow clinch all-time highs last week, with technology and other so-called growth names lagging cheaper value stocks that are expected to outperform as the economy re-opens after the pandemic shock.

At 09:56 a.m. EDT, the Dow Jones Industrial Average fell 2.43 points, or 0.01%, to 33,813.47, the S&P 500 gained 15.72 points, or 0.38 %, to 4,150.70 and the Nasdaq Composite gained 90.83 points, or 0.66 %, to 13,909.25.

With the first-quarter corporate earnings season under way, focus will be on results from tech behemoths Apple Inc, Microsoft Corp, Amazon Inc and Facebook Inc next week.

Cryptocurrency and blockchain-related stocks, including Riot Blockchain and Marathon Digital, dropped 2% each after bitcoin suffered hefty losses on fears that plans to raise capital gains taxes would curb investment in digital assets.

Advancing issues outnumbered decliners by a 2.9-to-1 ratio on the NYSE and by a 2.6-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and no new lows while the Nasdaq recorded 36 new highs and 17 new lows.