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US stocks rally on earnings, trade talks report

US stocks rally on earnings, trade talks report

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: Wall Street stocks rallied on Tuesday (Jul 23) following a batch of mostly good earnings and as reports that face-to-face US-China talks will be held next week lifted hopes of a trade agreement.

A broad range of companies from across the economy enjoyed strong gains after reporting results, reassuring investors who had been worried about a possible earnings "recession."

Analysts also pointed to news reports that US Trade Representative Robert Lighthizer will lead a delegation to China next week to resume negotiations.

The Dow Jones Industrial Average finished at 27,349.19, up 177.29 points (0.65 per cent) and only about 10 points away from a fresh record.

The broad-based S&P 500 gained 20.44 points (0.68 per cent) to end at 3,005.47, while the tech-rich Nasdaq Composite Index climbed 47.26 points (0.58 per cent) to close at 8,251.40.

The latest barrage of earnings released on Tuesday bolstered confidence that "the economy is not as weak as some had estimated," said Karl Haeling of LBBW. "We have enough of a sample size of corporate reports."

Analysts say expectations the Federal Reserve will cut interest rates also are boosting stocks, while worries about a "hard" Brexit under newly-picked Prime Minister Boris Johnson was seen as a possible headwind.

The round of largely positive earnings and apparent progress on trade countered a more cautious IMF outlook for 2019 and 2020 growth which described conditions as "precarious."

Among individual companies, Dow member Coca-Cola shot up 6.1 per cent as it lifted key 2019 financial projections, amid especially strong North American results.

Others seeing big gains after reporting quarterly results included toymaker Hasbro, industrial and aerospace giant United Technologies, paint company Sherwin-Williams, motorcycle company Harley-Davidson, JetBlue Airways and biotech company Biogen.

Banking shares rallied as the yield on the 10-year US Treasury note rose. Bank of America and Goldman Sachs both rose more than two per cent.

Source: AFP/de


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