Nasdaq, S&P 500 hit new highs as focus turns to earnings, economic data

The Nasdaq and the S&P 500 scaled new peaks on Monday, with investors awaiting the start of the second-quarter earnings season and a batch of economic data.

The tech-heavy Nasdaq Composite Index eased moments after hitting a fresh high, while six of the 11 major S&P sectors advanced in early trading.

The S&P 500 technology, communication services and consumer discretionary sectors, which house mega-cap technology stocks Tesla Inc, Apple Inc , Facebook Inc and Amazon.com, led gains.

Energy and other economy-linked value stocks declined after rebounding sharply on Friday.

The banking index rose 0.5%, with JPMorgan Chase , Goldman Sachs, Bank of America and other big banks up ahead of their earnings report starting Tuesday.

S&P, Nasdaq post record highs

Market participants will closely look at earnings for early clues on the economy and stocks tied to growth, while also assessing whether they could justify the current valuation at which the markets trades.

Second-quarter earnings for S&P 500 companies are expected to rise 65.8%, according to IBES data from Refinitiv.

"Great earnings results are already baked into the market," said Thomas Hayes, chairman of Great Hill Capital LLC in New York.

"The name of the game is guidance ... we need to see what managements have to say about their outlook to support current valuations and beyond."

Focus will also on a bunch of economic reports including headline US inflation data and retail sales later in the week, while also watching Federal Reserve Chair Jerome Powell's testimony before Congress on Wednesday and Thursday for views on inflation and the timing for tapering.

Wall Street has been dictated by concerns over higher inflation and the spread of the Delta coronavirus variant in the past few sessions, with investors seesawing between economy linked-value stocks and tech-heavy growth names.

"The inflation data is likely going to reignite some concern in the near term over how hot things are running," said Art Hogan, chief market strategist at National Securities in New York.

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"CPI (consumer price index) and PPI (producer price index) coming in above estimates will bring back that tug of war between growth and inflation."

At 10:04 a.m. ET, the Dow Jones Industrial Average was up 84.93 points, or 0.24%, at 34,955.09, the S&P 500 was up 4.41 points, or 0.10%, at 4,373.96, and the Nasdaq Composite was down 20.22 points, or 0.14%, at 14,681.70.

Didi Global Inc fell 5.1% after it confirmed China's cyberspace administration notified app stores to remove the ride-hailing company's 25 apps and said the move could impact its revenue in the region.

Virgin Galactic Holdings tumbled 12.5% as the space tourism company said it may sell up to $500 million worth of shares, a day after the company completed its first fully crewed test flight into space with billionaire founder Richard Branson on board.

Declining issues outnumbered advancers for a 1.23-to-1 ratio on the NYSE and a 1.78-to-1 ratio on the Nasdaq.

The S&P index recorded 42 new 52-week highs and no new low, while the Nasdaq recorded 45 new highs and 11 new lows.