Earnings push up market
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. 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.
Vincent Reinhart, chief economist at Standish Mellon, a unit of BNY Mellon Asset Management, said investors have mostly stayed calm during the trade dispute because they think most of the tensions will get worked out by November. Rising corporate profits, which have been helped by the recent tax cuts, are also helping.
“Everybody thinks a deal will be cut before the midterms,” he said. “That allows you to shake off the bad news and embrace the good.”
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.
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.