Strong Disney earnings push S&P 500, Dow to new peaks

The Dow and the S&P 500 opened at record highs on Friday, boosted by Walt Disney and tech-related shares, while signs of cooling inflation and a strong recovery in corporate earnings put the indexes on track for a second straight weekly gain.

Six of the 11 major S&P sectors advanced in early trading, with communications services, which houses Netflix Inc , Disney, Facebook Inc and Google-owner Alphabet Inc, rising 0.5%.

Disney jumped 3.1% after it topped Wall Street expectations for quarterly earnings as its streaming services picked up more customers than expected and pandemic-hit US theme parks returned to profitability.

A stellar earnings season, improving economic data and the Senate's passage of a large infrastructure bill have all reinforced investors' belief in the economic recovery, pushing US stocks to all-time highs in the past few sessions.

Concerns over higher inflation and a sooner-than-anticipated policy tapering by the Federal Reserve also ebbed after data earlier this week showed the pace of increase in US consumer prices slowed in July even as producer prices posted their biggest annual increase in more than a decade.

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"What we know about inflation at this point is that it remains relatively high, but it doesn't appear to be getting a lot worse at the moment," said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

"High inflation is not always a bad thing if it's accompanied by strong economic growth and right now it is just indicative that the economy is doing very well."

Investors are looking ahead to the minutes of the Fed's latest policy meeting, due next week, and the annual meeting of central bankers in Jackson Hole, Wyoming, later in August for fresh cues on policy.

At 10:25 a.m. ET, the Dow Jones Industrial Average was up 11.90 points, or 0.03%, at 35,511.75, the S&P 500 was up 4.97 points, or 0.11%, at 4,465.80, and the Nasdaq Composite was up 30.59 points, or 0.21%, at 14,846.85.

The Dow and S&P briefly eased from record highs after a survey showed US consumer sentiment dropped sharply in early August to a decade-low as Americans gave faltering outlooks on everything from personal finances to inflation and employment.

The Dow and the S&P 500 have risen 0.9% and 0.6% respectively so far this week, boosted by gains in economically sensitive stocks.

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DoorDash Inc fell 1.2% after the food-delivery firm's loss widened more than expected in the second quarter.

Pfizer Inc and Moderna Inc gained 1.7% and 1.6% respectively, after the US Food and Drug Administration authorized a booster dose of their COVID-19 vaccines for people with compromised immune systems.

US-listed shares of Pfizer's partner BioNTech were up 1.8%, while the broader S&P 500 healthcare sector rose 0.5%.

Declining issues outnumbered advancers for a 1.15-to-1 ratio on the NYSE and for a 1.61-to-1 ratio on the Nasdaq.

The S&P index recorded 48 new 52-week highs and no new lows, while the Nasdaq recorded 51 new highs and 82 new lows.