Dow hits record on strong earnings; Apple results eyed

By Tanya Agrawal

(Reuters) - The Dow came within spitting distance of the 22,000 mark and the S&P 500 was also higher, powered by strong corporate earnings.

The Nasdaq Composite, however, was kept in check by losses in healthcare shares, led by Regeneron. The drugmaker's shares were down 3.84 percent after a rating downgrade.

All eyes will now be on the quarterly performance of Dow-component Apple, which reports after the closing bell. The iPhone maker's shares were up 0.11 percent.

Tech has been the best performing sector this year, despite recent bouts of volatility on rising valuation concerns. The tech index rose 0.34 percent.

"While valuations overall and for the tech sector isn't cheap, some of the most powerful earnings growth has come from large-cap technology names," said Bill Northey, chief investment officer at U.S. Bank Wealth Management.

Investors have been counting on earnings to support high valuations for equities. The S&P 500 is trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times.

S&P 500 earnings are expected on average to have grown 10.8 percent in the second quarter, according to Thomson Reuters I/B/E/S.

"We are two-thirds through the earnings season and estimates are going only higher, including for the full year, which is helping support the fundamentals-driven market." said Northey.

At 12:42 p.m. ET (1642 GMT), the Dow Jones Industrial Average was up 93.78 points, or 0.43 percent, at 21,984.9. The index pierced through the historic 20,000 milestone in January and the 21,000 mark barely one and a half months later.

The S&P 500 was up 5.8 points, or 0.23 percent, at 2,476.10 and the Nasdaq Composite was up 7.87 points, or 0.12 percent, at 6,355.99.

The telecommunications and financials led the gainers, helped by a rise in Verizon and JPMorgan.

Economic data showed U.S. consumer spending barely rose in June as income failed to increase for the first time in seven months.

The core PCE numbers - the Federal Reserve's preferred metric to gauge inflation - for June edged up 0.1 percent following a similar increase in May.

Under Armour fell as much as 10.16 percent to a record low after the sportswear maker cut its full-year sales forecast.

Automaker Ford fell 2.58 percent, while General Motors was down 3.64 percent, after reporting a fall in monthly sales.

Sprint jumped 10.15 percent after swinging to a quarterly profit for the first time in three years, while Xerox rose 3.91 percent after its profit beat expectations.

Advancing issues outnumbered decliners on the NYSE by 1,597 to 1,188. On the Nasdaq, 1,445 issues fell and 1,366 advanced.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)