Solid earnings send stocks rising
U.S. stocks marched broadly higher on Wall Street on Tuesday as several major companies reported solid second-quarter gains.
Investors pushed stocks closer to the record highs they reached just over a week ago. The gains followed several stumbles last week, extending a period of volatility in July as investors weigh a looming rate cut by the Federal Reserve as well as uncertainties over trade and the economy.
Corporate earnings are now in full swing after last week’s relatively light load of mixed results. Nearly 150 companies in the Standard & Poor’s 500 index will report their financial results through Friday. Analysts are expecting earnings to decline overall for the second quarter in a row.
The earnings downturn has been modest so far and is being tempered by a still expanding economy and a Federal Reserve that has said it is willing to support growth.
The S&P 500 rose 20.44 points, or 0.7%, to 3,005.47. The Dow Jones industrial average rose 177.29 points, or 0.7%, to 27,349.19. The Nasdaq composite rose 47.27 points, or 0.6%, to 8,251.40.
Banks were the clear market leaders throughout the day. JPMorgan Chase, Bank of America and several others gained ground as bond yields rose.
The yield on the 10-year Treasury rose to 2.07% from 2.04% late Monday. Higher bond yields allow banks to charge higher interest on loans.
Coca-Cola soared 6.1% and reached a record high close after raising its revenue forecast for the year following a solid second quarter. The surprisingly good results helped lift other consumer product makers. Kraft Heinz rose 1.5% and Kellogg rose 3.0%.
Stanley Black & Decker surged 7.2% after it reported second-quarter profit well above analysts’ forecasts. The tool maker made one of the biggest gains in the industrial sector. General Electric rose 4.3% and 3M rose 1.6%.
Biogen rose 4.9% and Quest gained 5.4% on solid earnings results and helped push the broader healthcare sector higher.
Other notable earnings results came from toymaker Hasbro, which rose 10% after blowing away Wall Street’s second-quart profit expectations. It reported growth for many of its classic games and toys, including the board game Monopoly and Play-Doh, and for its digital game “Magic: the Gathering” and got some help from its partnership with Marvel on Avengers and SpiderMan action figures.
Home builders fell broadly after the National Assn. of Realtors reported a 1.7% drop in sales of previously owned homes in June. Rising prices and a scarce supply of homes have been making it more difficult for first-time home buyers. D.R. Horton fell 2.6% and PulteGroup shed 8.3%.
Benchmark crude oil rose 55 cents to $56.77 a barrel. Brent crude oil, the international standard, rose 57 cents to $63.83 a barrel.
Gold fell $5.20 to $1,420.10 an ounce, silver rose 7 cents to $16.41 an ounce and copper fell 2 cents to $2.69 a pound.
The dollar rose to 108.26 Japanese yen from 107.86 yen Monday. The euro weakened to $1.1150 from $1.1211.