S&P 500, Dow rise on optimism over earnings reports, stimulus
Reuters
Published Jul 21, 2020 06:37AM ET
Updated Jul 21, 2020 11:55AM ET
By Medha Singh and Devik Jain
(Reuters) - The S&P 500 and the Dow indexes rose on Tuesday following a slate of positive earnings reports from companies including IBM and Coca-Cola, and on optimism over an eventual vaccine and fiscal stimulus to revive a pandemic-battered economy.
The Nasdaq eased after hitting an intraday record high at the start of the session, as shares of Amazon.com Inc (O:AMZN) fell 1.7% following a near 8% jump a day earlier.
Energy (SPNY) jumped 6%, more than any other S&P sectors, tracking an uptick in oil prices on prospects of higher demand for fuel. [O/R]
Technology (SPLRCT) and consumer discretionary (SPLRCD), which are the best performing sectors this year, slipped.
"We've started to reposition portfolios a little bit away from what's seen as a long-term structural winners, in favor of companies that haven't really participated as much in the upside of what markets have done," said Matt Stucky, portfolio manager, equities, at Northwestern (NYSE:NWE) Mutual Wealth Management Co in Milwaukee, Wisconsin.
Promising early data from trials of three potential vaccines helped the S&P 500 close in the green for the year on Monday.
With the second quarter expected to see the worst of the pandemic's hit on profits, investors are more focused on hints on how long Corporate America would take to bounce back.
International Business Machines Corp (N:IBM) gained 1.5% after it signaled higher demand in its cloud computing business, as large corporations accelerate their digital shift.
Coca-Cola Co (N:KO) rose 3.2% as it said demand for its sodas were improving after the "most challenging" quarter for the year.
"Commentary on earnings call has been really important to investment communities, confirming the recovery story that's seen in the broad (economic) data applied to individual businesses, like Coca Cola," Stucky said.
Graphic: S&P 500 is about 4% from it's Feb.19 record close - https://fingfx.thomsonreuters.com/gfx/mkt/dgkpldmrkpb/spx%20chart1.PNG
U.S. lawmakers and White House officials headed into a day of negotiations on Capitol Hill on Tuesday, aimed at hammering out an agreement on new coronavirus aid legislation as infections and deaths surged to record levels across the country.
The U.S. government has less than two weeks to agree on a legislative package before additional unemployment assistance runs out for tens of millions of Americans.
Overnight, European Union leaders agreed on a massive coronavirus relief program.
At 11:05 a.m. ET, the Dow Jones Industrial Average (DJI) was up 315.72 points, or 1.18%, at 26,996.59 and the S&P 500 (SPX) was up 21.13 points, or 0.65%, at 3,272.97. The Nasdaq Composite (IXIC) was down 14.20 points, or 0.13%, at 10,752.89.
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Lockheed Martin Corp (N:LMT) rose 2% as the U.S. weapons supplier raised its full-year profit and revenue forecasts, driven by higher quarterly sales in its aeronautics unit that makes the F-35 fighter jet.
Advancing issues outnumbered decliners by a 4.52-to-1 ratio on the NYSE and by a 2.09-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and no new low, while the Nasdaq recorded 107 new highs and six new lows.
Written By: Reuters
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