Quarterly results, good forecasts spark gains

Stocks notched solid gains on Wall Street Tuesday as investors welcomed surprisingly good quarterly results from some of the nation’s biggest companies.

Strong earnings from Unitedhealth Group, Jpmorgan Chase and other companies helped power the market’s broad gains, erasing modest losses from a day earlier.

Investors are looking to the wave of quarterly report cards due out over the next few weeks to give them a clearer picture of what impact the trade war between the U.S. and China is having on corporate profits and the broader economy.

The encouraging earnings reports came with a spate of surprisingly good forecasts for the rest of the year, which helped ease concerns about a slowdown due to the costly trade conflict.

“That was what everybody was afraid of,” said JJ Kinahan, chief market strategist for TD Ameritrade. “Instead, we got ‘no, the future looks good.’”

Technology, health care, financial and communication services stocks drove much of Tuesday’s broad rally, which gave the market its fourth gain in five days.

Utilities and makers of consumer goods fell as investors regained an appetite for more risk. Those sectors are considered safeplay holdings and usually lag the market when investors are more confident.

Investors have been worried that corporate profits could be hampered by the trade dispute and growing economic uncertainty. Corporate earnings are expected to contract by 5% during the third quarter, according to Factset.

But similar forecasts were made ahead of both the first and second quarter reporting periods, and companies in the S&P 500 managed to deliver only a modest contraction each time.