Markets up as investors digest earnings, China tiff

Wall Street capped a choppy day of trading Wednesday with more gains for stocks as investors sized up a mix of company earnings reports and another flare-up in tensions between Washington and Beijing.

The S&P 500 rose 0.57%, its fourth gain in a row, after wavering between gains and losses for much of the afternoon. Strength in technology and health care stocks outweighed losses in energy companies, banks and elsewhere in the market. Treasury yields fell slightly, a sign of caution in the market.

“It’s a relatively muted day in terms of volatility,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “Having come off a furious rally off the March 23 lows, the market is clearly in a period of consolidation and assessing secondquarter earnings results.”

The S&P 500 gained 18.72 points to 3,276.02. The benchmark index is now within 3.3% of the all-time high it set in February. The Dow Jones Industrial Average rose 165.44 points, or 0.6%, to 27,005.84.

The Nasdaq recovered from an early dip to add 25.76 points, or 0.2%, to 10,706.13. The Russell 2000 index of small company stocks picked up 2.63 points, or 0.2%, to 1,490.14. Indexes in Europe fell. Asia ended mixed.

Homebuilders marched broadly higher after the National Association of Realtors said sales of previously occupied U.S. homes climbed last month by 20.7%. The gain is an encouraging sign for the housing market after the pandemic caused sales to plummet in the previous three months.

Despite the sharp monthly increase, purchases are still down 11.3% from a year ago, when homes had sold at an annual pace of 5.32 million. Builder NVR led the sector, surging 10.7%.

United Airlines slid 4.2% after reporting that its revenue plunged 87% in the second quarter as the coronavirus throttled air travel. Pfizer rose 5.1% after the U.S. government signed a contract with the company to deliver by December the first 100 million doses of a covid-19 vaccine it’s developing.

Traders also had their eye Wednesday on a flare-up in tensions between Washington and Beijing. The U.S. ordered China to close its consulate in Houston, saying it was necessary to protect American intellectual property. China said it would retaliate.

Adding to unease Wednesday was a report by the U.S. Centers for Disease Control that the number of coronavirus cases in some states is much higher than has been reported. Experts have said all along that the toll from the covid-19 pandemic is much higher than tallies of confirmed cases would indicate as a result of problems with testing and data collection.

Uncertainty over prospects for more financial aid to Americans and U.S. businesses also is casting a shadow, analysts said.

Investors continued to weigh company earnings reports Wednesday. So far, earnings have been coming in moderately better than expected, though companies have worked to lower expectations.

HCA Healthcare jumped 12%, the biggest gain in the S&P 500, after reporting earnings and revenue that topped analysts’ forecasts. Tesla’s latest quarterly results also exceeded Wall Street’s expectations. After the market closed, the electric car maker reported a surprise $104 million net profit for the second quarter. That gives Tesla its fourth-straight positive quarter, a prerequisite for admission into the S&P 500 index.

Among big companies reporting results this week: Intel, AT&T and Twitter report today and Verizon Communications and American Express report earnings Friday.

The yield on the 10-year Treasury note fell to 0.59% from 0.60%.

The price of benchmark U.S oil for September delivery fell 6 cents to settle at $41.90 a barrel Wednesday. Brent crude oil for September delivery fell 3 cents to $44.29 a barrel.