US Stocks Rise as Health Care and Industrial Companies Climb
U.S. stocks are rising Tuesday on strong results from industrial and health care companies and a Bloomberg News report that the U.S. and China are trying to restart trade talks. Technology companies are slightly higher after three days of sharp losses that dragged major stock indexes lower.
KEEPING SCORE: The S&P 500 index rose 14 points, or 0.5 percent, to 2,816 at closing. The Dow Jones Industrial Average gained 108 points, or 0.4 percent, to 25,414. The Nasdaq composite added 42 points, or 0.6 percent, to 7,672. The Russell 2000 index of smaller-company stocks jumped 17 points, or 1 percent, to 1,670.
INDUSTRIAL STRENGTH: Bloomberg reported that representatives of the U.S. and China are looking for ways to open new talks to end the trade war between them. 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.
The trade dispute could affect sales for many industrial companies. New taxes on aluminum and steel imports are also sending costs for those companies higher. Farm equipment maker Deere, which is threatened by China’s tariffs on soybeans, surged 5.2 percent to $145.41. Engine maker Cummins gained 4.5 percent to $143.43 after a better-than-expected second-quarter report. After a slump on Monday, construction equipment maker Caterpillar rose 3.1 percent to $144.16.
EARNINGS: Genetic testing tools maker Illumina raised its forecasts after a strong second quarter and its stock climbed 10.4 percent to $319.29. Pfizer rose 3.6 percent to $39.86 after the biggest U.S. drugmaker topped analysts’ projections and raised its forecasts for the year.
Elsewhere, cable company Charter Communications advanced 3 percent to $302.72 after its quarterly profit surpassed analysts’ estimates.
High-powered laser maker IPG Photonics nosedived 26.9 percent to $164.01 after it said demand from Europe and China worsened during the second quarter. The company’s revenue forecast for the current quarter fell far short of Wall Street’s estimates.
THE QUOTE: 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.
“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.”
TECH COMEBACK: Chip equipment maker KLA-Tencor soared 10.3 percent to $117.20 after it topped Wall Street expectations in the second quarter. Chipmaker Qualcomm gained 3.3 percent to $64.10 as it started to buy back stock from shareholders. Apple, which will report its quarterly results after the close of trading, added 0.8 percent to $191.50.
The technology index of the S&P 500 fell 5.3 percent over the past three days, its worst decline in three months. It’s up 0.5 percent Tuesday, slightly less than the S&P 500.
US ECONOMY: The Commerce Department said consumer spending grew another 0.4 percent in June, and a key measurement of inflation is up 2.2 percent over the last year. For the last four months, inflation has equaled or been slightly higher than the Federal Reserve’s target of 2 percent. The Fed is meeting Tuesday and Wednesday but isn’t expected to raise interest rates again until later this year.
The Labor Department said wages and benefits for U.S. workers continued to rise, but they grew at a slightly slower pace in the second quarter. That’s a sign that a tight labor market has yet to accelerate income gains.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.96 percent from 2.97 percent.
OVERSEAS: Economic growth in the 19-country eurozone slowed to 0.3 percent in the second quarter as trade tensions between the U.S. and Europe hurt business confidence. Since then, the EU and U.S. have agreed to hold off more tariffs and try to free up trade, though details remain hazy.
The French CAC 40 rose 0.4 percent and the British FTSE 100 gained 0.6 percent. The DAX in Germany added 0.1 percent.
Japan’s Nikkei 225 index rose less than 0.1 percent after the Bank of Japan didn’t announce any major changes to its monetary policies. South Korea’s Kospi added 0.1 percent. Hong Kong’s Hang Seng index fell 0.5 percent.
ENERGY: Benchmark U.S. crude lost 2 percent to $68.76 per barrel in New York. Brent crude, used to price international oils, fell 1 percent to $74.25 a barrel in London.
Wholesale gasoline slid 1.4 percent to $2.13 a gallon. Heating oil shed 1.8 percent to $2.13 a gallon. Natural gas slipped 0.5 percent to $2.78 per 1,000 cubic feet.
METALS: Gold rose 0.2 percent to $1,223.60 an ounce. Silver added 0.1 percent to $15.56 an ounce. Copper rose 1.4 percent to $2.83 a pound.
CURRENCIES: The dollar rose to 111.83 yen from 111 yen. The euro slipped to $1.1697 from $1.1710.
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