Health care and industrial stocks lead U.S. indexes higher

NEW YORK—U.S. stocks rose Tuesday following strong results from industrial and health care companies as well as a report that the U.S. and China are trying to restart trade talks. Small companies rallied.

Bloomberg News reported that representatives of the U.S. and China are looking for ways to open new talks to end their trade war. The report cited two people familiar with those efforts and said there was no agreement about a time frame for talks or what issues would be discussed. Earlier this month both nations placed import taxes on $34 billion worth of goods, and they’ve been threatening more severe measures.

The trade dispute could affect sales for many industrial companies and new tariffs on aluminum and steel imports are also sending costs for those companies higher. Companies including Deere and Caterpillar jumped while engine maker Cummins rose after its second-quarter report.

Earnings from companies including Pfizer and Illumina gave health care stocks a boost and real estate companies climbed as well. Banks were left out of the rally as interest rates slipped.

The S&P 500 index rose 13.69 points, or 0.5 percent, to 2,816.29, making up most of the losses it took on Monday. The Dow Jones Industrial Average gained 108.36 points, or 0.4 percent, to 25,415.19. The Nasdaq composite added 41.78 points, or 0.5 percent, to 7,671.79. The Russell 2000 index of smaller-company stocks jumped 17.67 points, or 1.1 percent, to 1,670.80.

Deere, a farm equipment maker whose profits would be hurt by China’s tariffs on soybeans, surged 4.8 percent to $144.79. Engine maker Cummins gained 4.1 percent to $142.81 after a better-than-expected second-quarter report. After a slump on Monday, construction equipment maker Caterpillar rose 2.9 percent to $143.80.

Genetic testing tools maker Illumina raised its forecasts after a strong second quarter and its stock climbed 12.1 percent to $324.36. Pfizer rose 3.5 percent to $39.93 after the biggest U.S. drugmaker topped analysts’ projections and raised its forecasts for the year.

High-powered laser maker IPG Photonics nosedived 26.9 percent to $164.04 after it said demand from Europe and China worsened during the second quarter. The company’s revenue forecast for the current quarter fell far short of Wall Street’s estimates.

Apple climbed 2.5 percent to $195.14 in aftermarket trading after reporting that its third-quarter profit and sales both topped analysts’ projections. Its fourth-quarter sales forecast was also better than expected.

The Commerce Department said consumer spending grew another 0.4 percent in June, and a key measurement of inflation is up 2.2 percent over the last year. For the last four months, inflation has equaled or been slightly higher than the Federal Reserve’s target of 2 percent. The Fed is meeting Tuesday and Wednesday but isn’t expected to raise interest rates again until later this year.

The Labor Department said wages and benefits for U.S. workers continued to rise, but they grew at a slightly slower pace in the second quarter. That’s a sign that even though unemployment is low, wages aren’t picking up.

Technology companies ended a three-day losing streak. Chip equipment maker KLA-Tencor soared 10.5 percent to $117.42 after it topped Wall Street expectations in the second quarter. Chipmaker Qualcomm gained 3.3 percent to $64.09 as it started to buy back stock from shareholders.

Apple added 0.2 percent to $190.29 as investors waited for its quarterly report.

Technology stocks had plunged more than 5 percent in three days, and they regained only a small portion of that Tuesday.

Benchmark U.S. crude lost 2 percent to $68.76 per barrel in New York. Brent crude, used to price international oils, fell 1 percent to $74.25 a barrel in London.

Wholesale gasoline slid 1.4 percent to $2.13 a gallon. Heating oil shed 1.8 percent to $2.13 a gallon. Natural gas slipped 0.5 percent to $2.78 per 1,000 cubic feet.