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US stocks climb amid earnings from Microsoft

London - US stocks rose, resuming their push to fresh records, as quarterly results from Microsoft and Morgan Stanley spurred optimism that corporate earnings can support further gains.

Microsoft climbed 5.3% after posting a better-than-predicted profit, and Morgan Stanley added 2.8% after its fixed-income trading revenue beat estimates. Intel, American Express and EBay are also among S&P 500 Index companies releasing financial results today.

The S&P 500 advanced 0.2% to 2 167.68 at 15:33 in New York, on track for its sixth all-time high in eight days.

“Microsoft has for a long time has been one of the bellwether stocks for the US - it is reflective to some extent of the whole economy and can feed through,” said Frances Hudson, an Edinburgh-based global thematic strategist at Standard Life Investments.

“I am seeing more greens than reds in terms of earnings beats, which seems relatively positive. Earnings season is definitely the main event right now.”

US shares have recovered their losses following the UK’s decision to leave the European Union amid signs of strength in the economy and speculation that the Federal Reserve will take its time raising interest rates. Traders are pricing in less than even odds of a hike until March 2017, though bets on a move by this December have climbed to 45% from just 12% two weeks ago.

The S&P 500 is up about 6 percent in 2016 after a rebound from the worst-ever start to a year sparked by worries that slowing growth in China would spread and oil plunged to a 12-year low. Anxiety over the UK’s Brexit vote briefly derailed stocks last month before assurances that major central banks would act to counter ill effects from Britain’s secession helped usher equities to all-time highs.

With stocks hovering at record levels, investor nervousness has cooled, sending the CBOE Volatility Index toward 23-month lows, based on early indications today. The measure of market turbulence known as the VIX closed Tuesday at a one-year low and has dropped 54% from a four-month high on June 24.

Of the S&P 500 firms that have released results so far this season, 78% beat earnings estimates and 61% topped sales projections.

Still, analysts forecast profit at its members will drop 5.8% in the second quarter, which would make it a fifth straight decline, the longest streak since 2009.

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