Strong earnings reports boosted U.S. stock markets Tuesday. The recovery comes after five straight days of losses for U.S. indexes. It’s not uncommon for stocks to reverse course after several days in one direction, and investors say the market is still lacking the foundation for an extended rally.
NEW YORK (AP) — Global stocks steadied and U.S. markets advanced Tuesday, as investors were encouraged by strong results from UPS, Ford and other big companies.
The recovery comes after five straight days of losses for U.S. indexes. It’s not uncommon for stocks to reverse course after several days in one direction, and investors say the market is still lacking the foundation for an extended rally.
“We just don’t see any significant catalyst that will move this market higher, even after last week’s declines,” said Kristina Hooper, global market strategist with Allianz Global Investors.
The Dow Jones industrial average rose 189.68 points, or 1.1 percent, to 17,630.27, ending near its high for the day. The Standard & Poor’s 500 index rose 25.61 points, or 1.2 percent, to 2,093.25 and the Nasdaq composite rose 49.43 points, or 1 percent, to 5,089.21.
A dose of corporate earnings gains helped drive the advance Tuesday.
UPS rose $4.82, or 5.1 percent, to $99.94. The company saw profits jump from a year ago, helped by stronger business overseas. UPS earned $1.23 billion, or $1.35 per share, for the three months ended June 30. A year earlier it earned $454 million, or 49 cents per share. UPS is sometimes seen a proxy for the global economy because of its huge role in delivering goods all over the world on a daily basis.
Ford rose 28 cents, or 1.9 percent, to $14.83. The carmaker said profits jumped 44 percent in the second quarter, helped by higher global sales and higher prices for premium trucks and SUVs. The profit of 47 cents a share easily beat Wall Street’s expectations of 37 cents a share.
Ford and UPS are just a few of the more than 170 companies in the S&P 500 that report their results this week.
Global markets were a little less stressed Tuesday.
The Shanghai Composite Index closed down 1.7 percent, but had been trading down as much as 4 percent earlier in the day. Chinese stocks plunged 8.5 percent on Monday, the biggest drop since February 2007, despite concerted efforts by the Chinese government to stem the market’s slide. European stocks rose roughly 1 percent.
Traders were turning their attention to the U.S. Federal Reserve as they try to assess when interest rates will rise. Fed policymakers started a two-day meeting on Tuesday, but few central bank watchers expect a rate hike. Many expect the Fed to begin its next cycle of rate increases in September or December. Ultra-low interest rates have been a boon for stock and bond markets, and many questions remain about how markets will react to the first increase since the 2008 financial crisis.
In other markets, the price of U.S. crude rose for the first time in five days on expectations that supply reports this week could show a decline. Brent crude, a benchmark for international oils used by many U.S. refineries, continued to fall, however. Benchmark U.S. crude rose 59 cents to close at $47.98 a barrel in New York. Brent fell 17 to close at $53.30 a barrel in London.
In other futures trading on the New York Mercantile Exchange:
– Wholesale gasoline fell 1.7 cents to close at $1.803 a gallon.
– Heating oil rose 0.8 cents to close at $1.604 a gallon.
– Natural gas rose 3.2 cents to close at $2.821 per 1,000 cubic feet.
U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.25 percent from 2.22 percent. The dollar rose to 123.58 Japanese yen from 123.27 yen on Monday. The euro fell to $1.1056 from $1.1087.
Precious and industrial metals futures ended mixed. Gold slipped 20 cents to $1,096.20 an ounce, silver rose four cents to $14.63 an ounce and copper gained five cents to $2.40 a pound.