The stock market continued its upward trajectory on Tuesday, with the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) hitting record highs.

Today's stock market

Index Percentage Change Point Change
Dow 0.37% 84.07
S&P 500 0.22% 5.46

Data source: Yahoo! Finance.

Airline stocks surged after Delta Air Lines gave a positive outlook, boosting the SPDR S&P Transportation ETF (NYSEMKT:XTN) by 1.2% to an all-time high. Telecom stocks also made big moves, with the iShares US Telecommunications ETF (NYSEMKT:IYZ) jumping 2.7%.

As for individual stocks, AMD (NASDAQ:AMD) shares rose on a product announcement, and Paychex (NASDAQ:PAYX) moved upward after reporting earnings.

Arrows pointing up superimposed over digital stock returns

Image source: Getty Images.

AMD launches a new chip

AMD announced a new Radeon graphics processing unit (GPU) today, and investors sent the stock up 5.6%. The processor extends AMD's Polaris architecture to "embedded" applications, meaning the chip is intended to go into a wide range of devices that need power and thermal efficiency, rather than into desktop or laptop computers. Examples of target applications are digital casino games, "thin clients" (like Chromebooks), medical displays, retail and digital signage, and industrial uses such as airplane cockpits.

"Developers are continuing to push the boundaries on what's possible for embedded systems, demanding more performance, more features and more design options, all while significantly reducing power consumption," said Colin Cureton, AMD director of product management. "At the GPU level, it is critical to provide versatile solutions that do not compromise on graphics performance or 4K multi-display capabilities."

AMD is locked in a battle with NVIDIA in the GPU arena, a hot growth market. AMD's Polaris architecture helped it gain share in 2016, and boards based on its newer Vega architecture are finding success in gaming and cryptocurrency-mining applications. AMD also won a key placement in Apple's coming iMac Pro. The prospect of AMD's GPUs becoming more competitive in a wider range of applications fueled investor optimism today.

Paychex reports strong earnings

Shares of payroll and human resources services provider Paychex rose 3.6% after the company reported fiscal first-quarter earnings that slightly missed revenue estimates but beat expectations for earnings. Revenue rose 4% to $817 million and adjusted earnings per share increased 11% to $0.62. The consensus analyst estimate was for EPS of $0.60 on revenue of $821 million. 

The company also raised its outlook for the fiscal year. Human resources services revenue for the full year, which comprised 43% of service revenue this quarter, is now projected to grow 12% to 14%, versus a previous estimate of 8% to 10%. Guidance for total revenue growth was hiked from 5% to 6%. The improvement in outlook reflects in part the impact of the company's August acquisition of HR Outsourcing, Inc., a national professional employer organization (PEO).

"We posted solid growth across our major human capital management ("HCM") product lines in the first quarter, in particular our comprehensive human resource ("HR") outsourcing solutions and our cloud-based time and attendance products continue to perform well," said CEO Martin Mucci in the press release.

Observers often look to Paychex's reports to get an idea of how small and medium-sized businesses in the U.S. are doing, since the company's results in part reflect job and wage growth in companies that outsource human resources functions. During the conference call, company management said that small business job growth has "moderated" after a burst late last year. But investors seem encouraged about the company's progress, especially its efforts to expand its PEO business.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.