The main US indexes ended the trading session on Tuesday with gains after investors welcomed the strong second-quarter data of companies such as Coca-Cola and United Technologies. Trade was also influenced by the news that negotiations between the US and China will begin next week.
The blue-chip index Dow Jones Industrial Average added 177.29 points, or 0.65%, to 27,349.19 points. The broader S&P 500 rallied by 0.7% to 3,005.47 points, while the technology Nasdaq Composite gained 0.16% to 8,217 points.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 6.80% to 12.61.
The materials sector was the best performer during the session, expanding by more than 2%. A strong performance was also registered by industrials and financials, which gained slightly more than 1%. On the flipside were Utilities, which fell by 0.63%.
The main Wall Street indexes rose slightly earlier in the day, as investors welcomed the strong second-quarter data of companies such as Coca-Cola and United Technologies.
Meanwhile, the stock exchanges were supported by expectations that the European Central Bank (ECB) and the US Federal Reserve may soon lower interest rates. According to the analysts' forecasts, the ECB will cut interest rates by 10 basis points on Thursday, and the US Federal Reserve is expected to lower interest rates by 25 basis points at the end of the month.
On the economic data front, existing home sales fell by 1.7% despite lower mortgages rates.
The deal between Congress and President Donald Trump to avoid a budget showdown and expand the debt ceiling is also helping sentiment.
However, stock gains might be limited ahead of Friday's second-quarter US GDP report, as investors wait and see how the American economy performed last quarter.
The 10-year US Treasury note was little changed around 2.05%.
Corporate stocks performance
The shares of Caterpillar and Deere increased by 2.1% and 1.9%, respectively.
Coca-Cola's stock jumped more than 6% after the company posted earnings and revenues that exceeded analysts' expectations.
Another company from Dow Jones, United Technologies, announced better than expected results for the quarter and its shares rose by 1.5%. Chief Executive Officer Gregory Hayes said its Collins Aerospace division has performed well and has become the engine of strong quarterly results. The company also raised its full-year earnings forecast and organic sales growth.
Biogen also outperformed its earnings expectations, raising its share price by 5%.
The shares in Hasbro Inc and Sherwin-Williams rose to all-time highs, gaining 9.95% and 7.84%, respectively.
Shares of Snap Inc gained 4.9% after Stifel analyst John Egbert upgraded the stock from "Buy" to "Hold", ahead of the social media company's second-quarter earnings results, due after the close of trade Tuesday.
Apple shares rose by 0.78%, following a report in the Wall Street Journal that it is in “advanced talks’ to buy Intel Corp's smartphone-modem chip business, valued at 1 billion USD. Apple stock rose 2.3% on Monday, the best performing stock in the Dow. Intel shares advanced 0.9%.
The top performers on the S&P 500 were Hasbro Inc (+9.95%), Sherwin-Williams Co (+7.84%) and Stanley Black & Decker Inc (+7.18%), while on the flipside were PulteGroup Inc (-8.33%), Zions Bancorporation (-5.31%) and Whirlpool Corporation (-3.96%).
Corporate earnings reports
United Technologies came out with quarterly earnings of 2.20 USD per share, beating the analysts' estimates of 2.04 USD per share. This compares to earnings of 1.97 USD per share a year ago. These figures are adjusted for non-recurring items. United Technologies posted revenues of 19.63 billion USD for the quarter ended June 2019, surpassing the analysts' estimates. This compares to year-ago revenues of 16.71 billion USD. The company has topped consensus EPS and revenue estimates four times over the last four quarters.
Coca-Cola reported quarterly earnings and revenue that beat analysts’ expectations, driven by sales of its namesake soda brand. The company's adjusted earnings per share reached 0.63 USD in the second quarter on 10 billion USD revenues. The beverage giant reported net income of 2.61 billion USD up from 2.32 billion USD a year earlier. Coca-Cola raised its full-year outlook for revenue and now expects organic revenue growth of 5% rather than 4%. Net sales in the Asia Pacific and Europe, Middle East and Africa segments were flat for the quarter, largely due to the impact of currency. Revenue in Latin America fell 6% because of a 13% currency headwind, although Coca-Cola said it had a strong performance in Mexico and Brazil. North America was the only region to reported net revenue growth. Price hikes and packaging initiatives helped propel revenue growth of 2%. The company said that it saw a strong performance from soda, water, sports drinks, juices, and dairy and plant-based beverages.
Over 18% of the S&P 500 companies posted quarterly data during the second-quarter earnings season. Of these, over 78% reported better-than-expected earnings. The total profits of the companies increased by 3.6%.
Posted from my blog with SteemPress : http://financeandmarkets.com/dow-jones-gained-more-than-177-points-at-the-end-of-todays-session-amid-strong-earnings-reports/
Trump wants to get re-elected and he and his team will do whatever they can to keep the stock market afloat despite how crappy the real economy is. The debt ceiling is raised and more easy money plus an unstoppable rate cut will descend upon the masses whether they like it or not.