Wall Street opens at record highs on strong earnings

By Tanya Agrawal

REUTERS - U.S. stock indexes opened at record highs on Wednesday following a set of strong quarterly earnings, led by Boeing and AT&T, while investors awaited the outcome of a two-day Federal Reserve meeting.

Boeing rose 7 percent, boosting the Dow, while AT&T's 3.8 percent gain made it the top stock on the S&P 500. Both companies posted quarterly profit that topped analysts' estimates.

The market's record run has left equities relatively expensive, but a strong corporate earnings season should allay some of those concerns.

Earnings of the S&P 500 companies are expected to have climbed 9.1 percent in the second quarter, up from an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.

The S&P 500 is trading around 18 times earnings estimates for the next 12 months, well above its long-term average of 15 times.

Investors will also focus on the Fed's statement, which is due at 2 p.m. ET (1800 GMT).

Although the central bank is not likely to raise interest rates, it is expected to discuss its monetary policy stance and the timing of a long-awaited balance sheet reduction. The Fed's statement is due at 2 p.m. ET (1800 GMT).

"Many questions still remain unanswered over both the timings and pace of rate hikes, which may weigh on the minds of Fed watchers ahead of the rate decision," said Lukman Otunuga, analyst with FXTM.

"Any unexpected surprises from the policy statement may come in the form of inflation concerns as the central bank acknowledges the fall in inflation and the impact it has on reaching its 2 percent inflation target."

Facebook, Gilead Sciences, O'Reilly Automotive report results after the bell.

At 9:36 a.m. ET (1336 GMT), the Dow Jones Industrial Average was up 95.55 points, or 0.44 percent, at 21,708.98 and the S&P 500 was up 2.24 points, or 0.09 percent, at 2,479.37.

The Nasdaq Composite was up 14.26 points, or 0.22 percent, at 6,426.44.

Seven of the 11 major S&P sectors were higher, with the telecommunications index's 2.8 percent rise leading the gainers.

Shares of Advanced Micro Devices jumped 7.8 percent after the chipmaker raised its full-year revenue expectations.

Beverage maker Coca-Cola fell 1.4 percent after its quarterly profit dropped 60 percent.

Ford Motor fell 1.9 percent after the automaker warned that its full-year automotive operating margin and cash flow would be lower than in 2016.

Amgen was down 2.5 percent after the biotechnology company's sales for an infection fighter drug came in below expectations.

Advancing issues outnumbered decliners on the NYSE by 1,292 to 1,154. On the Nasdaq, 1,212 issues rose and 943 fell.

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