US STOCKS-Tech lifts Nasdaq, S&P to new highs; IBM weighs on Dow

* Morgan Stanley rises as quarterly profit beats
expectations

* IBM falls as revenue misses estimates; drags on Dow

* CSX falls after forecast misses estimates

* Indexes up: Dow 0.09 pct, S&P 0.24 pct, Nasdaq 0.40 pct
(Adds details, changes comment, updates prices)

By Tanya Agrawal

July 19 (Reuters) – The Nasdaq and the S&P traded at record
levels in late morning trading on Wednesday, powered by
technology and healthcare stocks, while IBM capped gains on the
Dow.

IBM fell 3.7 percent after the company’s quarterly
revenue came in below expectations. The stock was the biggest
drag on the Dow and the S&P 500.

The S&P tech sector has been the best performing sector this
year despite concerns about stretched valuations as investors
look for growth sectors immune to policy uncertainties.

“At least in the second quarter and for the next quarter
technology is the only sector that will see double-digit
growth,” said Tom Cassidy, chief investment officer at Univest
Wealth Management Division.

“If you look at the sector, it isn’t all that overvalued
compared to the broader S&P index, except for a few names.”

Microsoft and Facebook were among the
top-three boosts to the S&P and the Nasdaq.

At 10:53 a.m. ET (1453 GMT), the Dow Jones Industrial
Average was up 18.48 points, or 0.09 percent, at
21,593.21, the S&P 500 was up 6.09 points, or 0.24
percent, at 2,466.70.

The Nasdaq Composite was up 25.51 points, or 0.4
percent, at 6,369.81.

Seven of the 11 major S&P 500 sectors were higher, with the
health index’s 0.55 percent rise leading the advancers.

Vertex Pharmaceuticals jumped 22 percent after the
company reported positive results for its cystic fibrosis
treatment. The stock was the biggest boost on the S&P and the
Nasdaq.

Investors will continue to focus on quarterly earnings to
see if high valuations are justified in the face of mixed
economic data, tepid inflation and policy gridlock in
Washington.

Analysts estimate an 8.7 percent rise in second-quarter
earnings and a 4.6 percent increase in revenue for the S&P 500
companies from a year earlier, according to Thomson Reuters
I/B/E/S.

This follows a robust first quarter when U.S. companies
posted the fastest rate of growth in earnings since 2011.

“Earnings so far have been good and even though they aren’t
as stellar as the first quarter, we still expect earnings to
grow in double digits for the year,” said Cassidy.

Morgan Stanley rose 3 percent after the Wall Street
bank reported better-than-expected profit and bond trading
revenue declines that were modest compared with arch-rival
Goldman Sachs’.

CSX fell 5.2 percent after the third-largest U.S.
railroad operator’s forecast missed expectations. The stock was
among the top drags on the S&P and the Nasdaq.

Advancing issues outnumbered decliners on the NYSE by 2,050
to 706. On the Nasdaq, 1,776 issues rose and 841 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

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