S&P, Nasdaq hit record highs as volatility drops

By Yashaswini Swamynathan

(Reuters) - The S&P 500 and the Nasdaq hit record intraday highs for the second day in a row on Tuesday as market volatility dropped to a decade low following Emmanuel Macron's victory in the French presidential election and strong U.S. corporate earnings.

The VIX, Wall Street's "fear gauge", hit 9.57 points, the lowest since late 2006, a day after closing at its lowest level in over two decades. A falling VIX typically indicates a bullish outlook for stocks.

The 10-year U.S. Treasury yield rose to its highest in a month, while gold prices fell, indicating a shift in investor preference for riskier assets.

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average was up 21.5 points, or 0.1 percent, at 21,033.78.

The S&P 500 was up 2.57 points, or 0.11 percent, at 2,401.95, slightly below its all-time high of 2,402.42.

The Nasdaq Composite was up 11.72 points, or 0.19 percent, at 6,114.38, after hitting an all-time high of 6,116.47.

Five of the 11 major S&P sectors were higher, while the typically defensive plays such as utilities and telecom services fell.

Since Donald Trump's election in November the S&P 500 has risen nearly 14 percent, raising questions about market valuations. However, solid first-quarter earnings could allay some of those fears.

S&P 500 earnings on average have grown 14.4 percent, up from 10.1 percent estimated at the start of the earnings season, according to Thomson Reuters I/B/E/S.

Shares of Valeant Pharmaceuticals jumped more than 16 percent after the company posted its first profit in six quarters.

Endo International, Office Depot and Marriott also rose after reporting better-than-expected quarterly earnings.

Advancing issues outnumbered decliners on the NYSE by 1,447 to 1,013. On the Nasdaq, 1,279 issues rose and 868 fell.

The S&P 500 index showed 19 52-week highs and no lows, while the Nasdaq recorded 37 highs and 11 lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)