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WALL STREET - Jan 23 (Reuters) - The S&P 500 climbed to a record high close on Tuesday as investors digested a mixed bag of early quarterly results and awaited a slew of additional reports from Tesla and other companies later this week.
It was the third straight all-time high for the benchmark stock index, and many investors view upcoming quarterly reports from the heavily weighted "Magnificent 7" group of megacap companies as key to whether Wall Street's recent rally continues or loses steam.
"It's a crescendo of reports tomorrow and Thursday, and then next week will be even busier," said Art Hogan, chief market strategist at B. Riley Wealth. "We've got a lot of things to contemplate over the course of this week and next that will likely will end up being a market positive."
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In extended trade, Netflix NFLX.O rallied 3.2% after the video streaming service blew past Wall Street subscriber estimates in the fourth quarter, driven by a strong slate of shows.
The S&P 500 climbed 0.29% to end the session at 4,864.59 points.
The Nasdaq gained 0.43% to 15,425.94 points, while Dow Jones Industrial Average declined 0.25% to 37,905.45 points.
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Verizon Communications VZ.N rallied 6.7% after forecasting a strong annual profit and posting its highest quarterly subscriber additions in nearly two years, while Procter & Gamble PG.N gained 4.2% after it topped second-quarter profit expectations.
3M MMM.N tumbled 11% after forecasting dour annual earnings, while Johnson & Johnson JNJ.N dipped 1.6% after reporting quarterly results just above expectations.
D.R. Horton DHI.N dropped over 9% after the homebuilder missed estimates for first-quarter profit.
Tesla TSLA.O climbed 0.2% ahead of its report late on Wednesday.
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Analysts on average see S&P 500 .SPX fourth-quarter earnings up 4.6% year over year, compared to 7.5% growth in the third quarter, according to LSEG data.
Stock market valuations appear rich. The S&P 500 is trading at about 20 times forward 12-month earnings estimates, well above its long-term average of 16 times, according to LSEG.
"Earnings for all equity classes peaked and will move lower as the economy weakens and revenue growth stalls," Wells Fargo senior global market strategist Sameer Samana said in a note.
Wall Street's recent gains have been fueled by expectations of lower interest rates and optimism around artificial intelligence, which has helped lift the Philadelphia chip index .SOX over 5% so far in 2024, adding to a 65% surge last year.
The personal consumption expenditure (PCE) index - the Federal Reserve's preferred inflation gauge, as well as the S&P Global PMI readings and an advance fourth-quarter GDP print this week will be key in assessing the central bank's next interest rate decision when it meets on Jan. 31.
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The Fed will wait until the second quarter before cutting rates, according to a Reuters poll, with June now seen more likely than May.
Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 1.2-to-one ratio.
The S&P 500 posted 34 new highs and one new low; the Nasdaq recorded 102 new highs and 90 new lows.
Volume on U.S. exchanges was relatively light, with 10.9 billion shares traded, compared to an average of 11.4 billion shares over the previous 20 sessions.
S&P 500 components so far in 2024 https://tmsnrt.rs/3HygkDr
(Reporting by Ankika Biswas, Johann M Cherian and Shubham Batra in Bangalore and by Noel Randewich in Oakland. Calif.; Editing by Pooja Desai, Maju Samuel and Aurora Ellis)
