U.S. stocks return to record high
Corporate profits continue to rise
U.S. stock indexes returned to records Tuesday as corporate profits continue to come in better than analysts expected.
McDonald’s and Caterpillar were among the big companies that reported healthier-than-forecast results. Sharp moves higher in prices for oil, metals and other commodities also helped lift companies that produce energy and raw materials. That more than offset losses for health care companies and stocks that pay relatively big dividends, which were hurt by a rise in
Treasury yields.
The
Standard
& Poor’s
500 rose
7.17 points, or 0.3 percent, to an all-time high of 2,477.08. It was the first gain for the index in four days.
The Dow Jones industrial average rose 100.26, or 0.5 percent, to 21,613.43. The Nasdaq composite added 1.37 points, or less than 0.1 percent, to 6,412.17, and the Russell 2000 index of small-cap stocks gained 12.33, or 0.9 percent, to 1,450.39. Both the Nasdaq and Russell set records.
“There’s a lot of hope built into the market at current levels,” said Rob McIver, portfolio manager at the $6.3 billion Jensen Quality Growth fund. “We’re cautioning investors to be cautious and conservative.”
Leading the way for the market Tuesday were energy stocks, which benefited from a second strong day for the price of oil. Benchmark U.S. crude rose $1.55, or 3.3 percent, to settle at $47.89 per barrel. Brent crude, the international standard, gained $1.60, or 3.3 percent, to $50.20 a barrel.
That helped energy stocks in the S&P 500 climb 1.3 percent, tied for the biggest gain among the 11 sectors that make up the index.
The yield on the 10-year Treasury note climbed to 2.32 percent from 2.26 percent late Monday. The two-year yield climbed to 1.38 percent from 1.36 percent, and the 30-year yield rose to 2.91 percent from 2.83 percent.
The rise in yields came as the Federal Reserve began a two-day policy meeting on interest rates. The central bank has already raised rates three times since December, but few investors expect it to make another move when it announces its decision Wednesday.
“There’s a lot of hope built into the market at current levels. We’re cautioning investors to be ... conservative.” – ROB MCIVER