The News Herald (Willoughby, OH)
Pepsi leads household goods stocks rally
Stocks rose for the fourth day in a row as strong results from Pepsi helped household goods companies.
NEW YORK » U.S. stocks shook off some midday doldrums and rose for the fourth day in a row Tuesday as strong results from Pepsi helped household goods companies. The market is at its highest level since early February.
Shares of most kinds of large companies finished higher, with food and consumer products makers, energy companies and utilities making some of the biggest gains. Pepsi staged its biggest rally in almost nine years after a solid second-quarter report.
The S&P 500 is the highest it’s been since Feb. 1 and has climbed seven times in the last eight days even though the U.S. and China are now in open conflict over trade. Wall Street has focused instead on last week’s strong jobs report for June as well as company earnings reports.
Invesco Chief Global Market Strategist Kristina Hooper said investors are taking a risk by overlooking how damaging the trade war might get.
“This is all about pushing aside that which is messy and difficult to calculate,” she said. “It’s far easier to ignore it.”
The S&P 500 index added 9.67 points, or 0.3 percent, to 2,793.84. The Dow Jones Industrial Average rose 143.07 points, or 0.6 percent, to 24,919.66.
The Nasdaq composite picked up 3 points to 7,759.20. The Russell 2000 index of smaller-company stocks lost 8.99 points, or 0.5 percent, to 1,695.62 after big gains over the last five days. Slightly more stocks rose than fell on the New York Stock Exchange.
Major U.S. banks including JPMorgan Chase and Citigroup will announce their results Friday morning, and most of the companies in the S&P 500 will report their results in the weeks after that.
Pepsi’s beverage sales are still struggling as the company tries to adjust to Americans’ changing drinking habits. The maker of Gatorade, Mountain Dew and Tropicana said sales in North America fell, but its earnings were better than expected and analysts were pleased with its results in other markets.
The stock rose 4.8 percent to $112.89.
Investors are looking forward to another round of strong profit growth thanks to the growing U.S. economy and the corporate tax cut that took effect at the end of 2017. Hooper, of Invesco, said that could help stocks over the next few weeks, but said the market might struggle after that.
She said the taxes the U.S. placed on imported washing machines in January have clearly hurt sales, and there are signs the newer tariffs are affecting business spending.
U.S. crude oil rose 0.4 percent to $74.11 a barrel in New York. Brent crude, used to price international oils, gained 1 percent to $78.86 a barrel in London.
A shakeup at Lowe’s continued as the home improvement chain said its chief operating officer and several other executives are leaving because their jobs are being eliminated or assigned to other executives. Marvin Ellison became Lowe’s CEO on July 2 and the company’s chief financial officer announced his retirement in June.