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Dow closes above 43k for first time

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Nvidia ( NVDA ) finishes at record high

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Caterpillar ( CAT ) falls after Morgan Stanley downgrades rating

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Boeing ( BA ) down after job-cut plans, jet delivery delay

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Indexes up: Dow 0.47%, S&P 500 0.77%, Nasdaq 0.87%

(Adds closing prices)

By David French

Oct 14 (Reuters) - Wall Street ended higher on Monday,

with both the S&P 500 and the Dow posting fresh record finishes,

as investors bought into technology stocks ahead of a busy week

packed with corporate earnings and crucial economic data.

On a somewhat subdued day for trading, given bond markets

were shut due to the federal holiday, just 9.55 billion shares

changed hands, versus the 12.05 billion shares, which moved on

average over the last 20 trading days.

However, there was enough upward momentum carried over from

Friday, when major banks kicked off the third-quarter corporate

earnings season on a positive note, to send the Dow Jones

Industrial Average above 43,000 points for the first

time.

With 41 S&P 500 companies expected to report results this

week, this flood of new data points from corporate America will

help investors assess the health of the U.S. economy, and

whether companies can continue to justify stretched stock market

valuations.

Before then though, it was technology stocks, which helped

drive markets higher on Monday with semiconductors particularly

in vogue. An index of semiconductor companies jumped 1.8%

to a more than two-month high, aided by the 6.8% advance by Arm

Holdings, as well as market heavyweight Nvidia ( NVDA ),

which rose 2.4% to a record close.

The information technology index was a leading

gainer among the S&P 500 sectors, rising 1.4%. Among other

growth stocks, Alphabet, Apple ( AAPL ), Microsoft ( MSFT )

and Tesla all advanced between 0.6% and 1.6%.

The S&P 500 gained 44.82 points, or 0.77%, to

5,859.85 points, while the Nasdaq Composite climbed

159.75 points, or 0.87%, to 18,502.69. The Dow Jones Industrial

Average rose 201.36 points, or 0.47%, to 43,065.22.

Despite the Dow's positive milestone, its gains on Monday

were kept in check by a 2% drop in Caterpillar ( CAT ),

following a brokerage downgrade, and a 1.3% fall in Boeing ( BA )

after the planemaker flagged a larger-than-expected Q3

loss on Friday.

Bank earnings may have boosted hopes that solid results

could help stocks continue their strong 2024 run. However, with

stock valuations stretched - the S&P 500 is trading at 21.8

times forward earnings, versus a long-term average of 15.7 -

companies might struggle to satisfy investors.

Year-over-year third-quarter earnings growth for the S&P 500

is estimated at 4.9%, according to data compiled by LSEG on

Friday.

"If you think about the earnings backdrop going into it, I

would expect the bias to probably lead to the upside in this

earnings cycle," said Kevin McCullough, portfolio consultant at

Natixis Investment Managers Solutions.

"It's not like the prior earnings cycles where you went in

with a really lofty set of expectations and it was really hard

for companies to deliver on that," he said, adding because the

bar was now a little bit lower, it was easier for investors to

see company reports in a positive light.

Among those reporting numbers on Tuesday are a slew of

big-name financials, including Bank of America ( BAC ) and

Citigroup ( C/PN ), as well as healthcare giants Johnson & Johnson ( JNJ )

and UnitedHealth Group ( UNH ).

Investors will also watch for crucial economic data this

week, notably the September retail sales figures, for clues on

the financial health of U.S. consumers.

Natixis' McCullough said consumer-related data is becoming

more important for clues on Fed thinking, as the central bank

switches more towards fulfilling the growth side of its mandate.

The two Fed speakers on Monday both adopted cautious tones

on future rate policy. Minneapolis Fed President Neel Kashkari

said he sees modest interest-rate cuts ahead as inflation hovers

near the central bank's 2% target. Speaking this afternoon, Fed

Governor Christopher Waller called for "more caution" on

interest-rate cuts going forward.