S&P cruises past 2,700 as tech stocks climb

By Sruthi Shankar

REUTERS - Wall Street's main indexes hit records on Wednesday, with the benchmark S&P 500 index breaching the 2,700-mark for the first time on gains in technology stocks.

Shares of Oracle and IBM rose about 3 percent following brokerage upgrades, helping the S&P technology index gain about 0.9 percent.

U.S. stocks kicked off 2018 on a strong note on Tuesday, and world markets rose to new highs on Wednesday as early indications suggested it would be another year of synchronized global growth led by a robust European economy.

"If you look at the S&P 500 and what makes up the sectors, technology has the largest international exposure. When you look at driving futures sales, it has to come from growing economies," said Jeff Powell, managing partner of Polaris Wealth Advisors.

But gains in the technology sector were capped by a 2.43 percent drop in Intel following a report that its processor chips had a fundamental design flaw. The stock was the biggest drag on all the three major indexes.

Rival chipmaker Advanced Micro Devices gained 6.5 percent. Nvidia and Micron were up 5.2 percent and 3 percent.

A report showed U.S. factory activity increased more than expected in December, boosted by a surge in new orders growth, in a further sign of strong economic momentum at the end of 2017.

The Institute for Supply Management said its index of national factory activity jumped to 59.7 in December from 58.2 in November.

The report comes ahead of the scheduled release by the Federal Open Market Committee of minutes of its December meeting.

Investors are likely to scan the release for hints on rate tightening action in the coming months and the impact of the U.S. tax overhaul on the economy and inflation.

The odds of a March rate hike jumped to 61.9 percent after the report from 56.3 percent before, according to CME Group's Fedwatch tool.

At 10:56 a.m. ET (1556 GMT), the Dow Jones Industrial Average was up 50.79 points, or 0.2 percent, at 24,874.8 and the S&P 500 was up 10.53 points, or 0.39 percent, at 2,706.34. The Nasdaq Composite was up 43.32 points, or 0.62 percent, at 7,050.22.

The S&P closed above the 2,600-point mark for the first time on Nov. 24, after crossing three such 100-point marks in 2017.

Scana Corp rose 23.5 percent after Dominion Energy said it would buy the utility in an all-stock deal $7.9 billion deal. Dominion fell 3.2 percent.

MoneyGram International fell 8.7 percent after Alibaba-owned Ant Financial's plan to acquire the U.S. money transfer company in a $1.2 billion deal collapsed due to national security concerns.

Harley-Davidson declined 4.3 percent after brokerage Longbow Research downgraded the stock to "underperform", citing concerns about weak U.S. retail sales.

Advancing issues outnumbered decliners on the NYSE by 1,582 to 1,205. On the Nasdaq, 1,656 issues rose and 1,147 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)