US STOCKS-Wall Street hits new highs on rate-cut optimism

Reuters

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    * Major indexes touch record highs
    * Ford gains on joining forces with Volkswagen
    * J&J weighs on healthcare stocks
    * Indexes up: Dow 0.71%, S&P 500 0.33%, Nasdaq 0.49% 

 (Updates to midafternoon in U.S. markets, changes byline, adds
NEW YORK to dateline)
    By April Joyner
    NEW YORK, July 12 (Reuters) - U.S. stocks hit record highs
on Friday as high expectations for an interest-rate cut from the
Federal Reserve continued to propel shares while investors
awaited next week's kickoff of the corporate earnings season.
    In his two-day testimony before Congress, Federal Reserve
Chairman Jerome Powell said the U.S. economy was still under
threat from disappointing factory activity, tame inflation and a
simmering trade war and that the central bank stood ready to
"act as appropriate."
    The S&P 500  .SPX  traded above the 3,000 level for a third
straight session, with industrial  .SPLRCI  and consumer
discretionary  .SPLRCD  posting gains of 1% or more.
    With firm expectations for interest-rate cuts in place, the
focus among several investors has turned to the corporate
earnings season as large U.S. banks, including Citigroup Inc
 C.N  and JPMorgan Chase & Co  JPM.N , are set to report next
week.  urn:newsml:reuters.com:*:nL2N24A18L
    "All this week has been the Federal Reserve's influence,"
said Mark Kepner, equity trader at Themis Trading in Chatham,
New Jersey. "At the position we're at here, we could see
ourselves declining a bit if earnings are not that good."
    Analysts currently estimate that S&P 500 companies will 
report a 0.4% dip in second-quarter earnings, according to
Refinitiv IBES data.
    The Dow Jones Industrial Average  .DJI  rose 191.72 points,
or 0.71%, to 27,279.8, the S&P 500  .SPX  gained 9.99 points, or
0.33%, to 3,009.9 and the Nasdaq Composite  .IXIC  added 40.05
points, or 0.49%, to 8,236.09.
    Data for U.S. producer prices in June showed the smallest
annual increase in producer inflation in nearly 2-1/2 years and
a slowdown in underlying producer prices, which suggested that
overall inflation could remain moderate for a while.
 urn:newsml:reuters.com:*:nL2N24C1HN
    Ford Motor Co  F.N  shares gained 2.65% after the automaker
and Volkswagen AG  VOWG_p.DE  said they would join forces to
develop autonomous and electric cars.  urn:newsml:reuters.com:*:nL8N24D385    
    Johnson & Johnson  JNJ.N  shares slid 4.3% after Bloomberg
reported that the U.S. Justice Department is pursuing a criminal
probe into whether the healthcare conglomerate lied about
potential cancer risks of its talcum powder.  urn:newsml:reuters.com:*:nL4N24D3HS
    Johnson & Johnson's slide dragged down healthcare shares,
whose 1.3% decline was the biggest among S&P 500 sectors.
    Illumina Inc  ILMN.O  shares tumbled 15.7%, the most among
S&P 500 companies, after the gene sequencing company's
preliminary second-quarter revenue came in below analyst
estimates.  urn:newsml:reuters.com:*:nL4N24D2L0
    Advancing issues outnumbered declining ones on the NYSE by a
1.92-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favored advancers.
    The S&P 500 posted 46 new 52-week highs and two new lows;
the Nasdaq Composite recorded 76 new highs and 40 new lows.

 (Reporting by April Joyner; Additional reporting by Shreyashi
Sanyal and Manas Mishra in Bengaluru; Editing by Sriraj
Kalluvila, Shounak Dasgupta and Jonathan Oatis)
 ((April.Joyner@thomsonreuters.com; +1 646 223 7480; Reuters
Messaging: april.joyner.thomsonreuters.com@reuters.net; Twitter:
@aprjoy))

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