Caterpillar, 3M push Dow higher
NEW YORK — Construction and mining equipment maker Caterpillar and Post-it note maker 3M led a rally in industrial companies Tuesday after they made strong thirdquarter reports. Other U.S. stocks finished the day with smaller gains.
The Standard & Poor’s 500 index rose 4.15 points, or 0.2 percent, to 2,569.13. The Dow Jones industrial average jumped 167.80 points, or 0.7 percent, to 23,441.76. The Nasdaq composite climbed 11.60 points, or 0.2 percent, to 6,598.43. The Russell 2000 index of smaller-company stocks rose 2.93 points, or 0.2 percent, to 1,500.42.
Caterpillar and 3M both raised their forecasts for the rest of the year after they did better than analysts had expected, and their stocks jumped. Combined, the two companies were responsible for almost all of the 167-point gain in the Dow Jones industrial average, which sent the 30-stock index to a record high. Bond yields and interest rates rose, which helped banks, and technology companies climbed as well. Investors applauded reports from McDonald’s and General Motors while health care companies including drugmakers stumbled. Household goods makers also declined.
UBS analyst Steven Fisher said he thinks Caterpillar, as well as other companies that make construction and mining equipment, are benefiting from gains in metals and oil prices over the past year to year-and-a-half.
“There’s now a catch-up to not only meet the demand but also replenish inventories,” he said. That delayed reaction helped Caterpillar in the third quarter and he said investors have high expectations for other machinery makers.
Caterpillar’s stock gained $6.56, or 5 percent, to $138.24, and it’s up 49 percent in 2017. 3M, best known for Postit notes, said its industrial, electronics and energy and health care businesses all got stronger and it expects a larger annual profit. 3M shares rose $13.10, or 5.9 percent, to $234.65.
The top gainer in the Dow average this year is aerospace company Boeing, which rose $3.68, or 1.4 percent, to $266, giving it a 71 percent jump since the start of the year.
Bond prices continued to fall. The yield on the 10-year Treasury note rose to 2.42 percent from 2.37 percent and reached its highest level in five months. That helped banks, as higher interest rates increase their profits on lending. Bank of America shares rose 52 cents, or 1.9 percent, to $27.68 and JPMorgan Chase rose $1.58, or 1.6 percent, to $100.92.
Technology companies recovered most of Monday’s losses. Specialty glass maker Corning jumped $1.93, or 6.4 percent, to $31.94 after its third-quarter report surpassed what Wall Street expected. Oracle rose 67 cents, or 1.4 percent, to $49.98 and video game maker Activision Blizzard added $1.27, or 2.1 percent, to $62.73.
Health care companies took losses. Drugmaker Biogen fell $12.82, or 3.9 percent, to $315.73 as sales of its multiple sclerosis drugs Tecfidera and Tysabri disappointed analysts. Eli Lilly sank $2.01, or 2.3 percent, to $85.17. The company posted a solid third quarter but said diabetes drug prices are still under pressure.
Benchmark U.S. crude gained 57 cents, or 1.1 percent, to $52.47 a barrel in New York. Brent crude, used to price international oils, climbed 96 cents, or 1.7 percent, to $58.33 a barrel in London.