The S&P 500 and the Dow closed higher on Wednesday as investors eyed better than expected third-quarter earnings from U.S. companies.
While the Nasdaq lagged as technology stocks took a breather, the Dow Jones Industrials Average surpassed its previous record reached in mid-August while the benchmark S&P 500 index came within five points of its early September record during the session.
The S&P's healthcare index rallied for a second day in a row with help from Anthem and Abbott, which gained on impressive financial forecasts.
The S&P had fallen almost 6% below its record by Oct. 4 as investors worried about supply chain problems, profit margin pressures, higher wages and increasing input costs ahead of the earnings season, which kicked off last week.
And while U.S. companies have been citing supply chain problems and higher costs during their earnings calls, investors have been relieved so far that they seem to be able to maintain profit margins by passing on costs to customers, according to Jack Janasiewicz, strategist and portfolio manager at Natixis Investment Managers Solutions.
"Earnings are what matter and thus far what we've seen have actually been better than expected. Margins are actually holding up, said Janasiewicz.
"The bar was set pretty low coming into (earnings season) so that makes things a little easier ... Things are coming out, so far, better than expected. That's putting upward pressure on stocks."
With just about 14% of S&P 500 third-quarter reports in, analysts were expecting earnings for the benchmark index to rise 33% from the year-ago quarter. More than 85% of those who reported beat expectations, according to the latest data from Refinitiv.
According to preliminary data, the S&P 500 gained 17.14 points, or 0.38%, to end at 4,536.77 points, while the Nasdaq Composite lost 6.25 points, or 0.05%, to 15,121.68. The Dow Jones Industrial Average rose 157.95 points, or 0.45%, to 35,615.26.
During the session, the CBOE volatility index, also known as Wall Street's fear gauge, fell to its lowest level since Aug. 13.
The S&P 500 Value index, which houses economically-sensitive stocks like energy and industrials, hit a fresh record, during the session as investors eyed robust economic growth.
Abbott Laboratories advanced after raising its full-year profit forecast on a rebound in COVID-19 test sales.
Anthem Inc climbed after raising its full-year earnings forecasts. However, Biogen Inc shares had a choppier session as it reported a much smaller-than-expected quarterly sales of its Alzheimer's drug while it raised its full year earnings forecast.
Netflix's global sensation "Squid Game" helped lure more customers than expected, the world's largest streaming service said as it predicted a packed lineup would further boost signups through the end of the year. But its shares, fell after hitting a record high earlier this month.
Investors were watching anxiously for results from Tesla Inc after the close, with costs and margins in focus amid chip shortages and supply chain issues.
Verizon Communications Inc gained ground as it added more postpaid phone subscribers than expected in the third quarter, while shares in Baker Hughes Co fell as its profit missed expectations.