Wall St. rides on Powell remarks
NEW YORK — Wall Street stocks rose on Tuesday, with the Dow Jones Industrial Average posting its fourth consecutive session of gains after Federal Reserve Chairman Jerome Powell expressed an optimistic US economic view and solid earnings bolstered the outlook for a robust reporting period.
In a written statement, Mr. Powell signaled that an era of stable economic growth may continue, but the Fed chairman was challenged in a congressional hearing by senators worried about the Trump administration’s trade policies.
“( Powell) suggested that they’re keeping an eye on trade developments and people are looking at that as a signal that they may moderate their rate increases if they see some signs of danger,” said Peter Jankovskis, co- chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
The US Treasury yield curve hit its flattest in over a decade as Mr. Powell’s upbeat economic view supported more rate hikes, with two-year yields climbed to their highest in nearly a decade.
EARNINGS OPTIMISM
As the second-quarter earnings season shifts into high gear this week, analyst forecasts have grown rosier.
Analysts now see secondquarter S&P 500 earnings growth of 21.2%, up from 20.7% on July 1. Of the 39 companies in the index that have reported so far, 84.6% have come in ahead of Street expectations, according to Thomson Reuters data.
Earnings optimism was boosted by a report from the Federal Reserve showing an increase in US industrial production led by a rebound in manufacturing.
“Economic reports… are suggesting that activity in the second quarter might have been better than expected,” Mr. Jankovskis said.
“That, perhaps, is playing into some of these increases in forecasts.”
The Dow Jones Industrial Average rose 55.53 points or 0.22% to end at 25,119.89; the S&P 500 gained 11.12 points or 0.40% to 2,809.55; and the Nasdaq Composite added 49.40 points or 0.63% to 7,855.12.
The Nasdaq’s advance was led by Facebook, Inc., Google-parent Alphabet, Inc. and Amazon.com, Inc., all of which hit record highs.
Of the 11 major sectors of the S&P 500, seven ended the session in positive territory, with materials and technology seeing the strongest gains.
Johnson & Johnson led the health care sector’s 0.50% advance, rising 3.5% after beating analysts’ profit and revenue estimates.
Shares of Goldman Sachs Group, Inc. edged down 0.20% as the investment bank reported better- than- expected earnings and said David Solomon would replace outgoing Chief Executive Officer Lloyd Blankfein.
UnitedHealth Group, Inc. weighed the most heavily on the Dow, its shares down 2.6% as the largest US health insurer reported higher- than- expected quarterly medical costs.
Netflix, Inc. regained ground, rising 5.2% after falling more than 14% following the streaming services company’s reported shortfall in second-quarter subscriber additions.
Advancing issues outnumbered declining ones on the NYSE by 1.39 to one; on Nasdaq, a 1.38-to-one ratio favored advancers. The S&P 500 posted 25 new 52-week highs and one new low; the Nasdaq Composite recorded 82 new highs and 52 new lows. Volume on US exchanges was 6 billion shares, compared to the 6.54 billion average over the last 20 trading days. —