Dow moves toward record as United Tech and Coke surge
The S&P 500 and Nasdaq closed at record highs Tuesday as investors cheered the latest batch of solid corporate earnings, including those from blue-chip Coca-Cola Co. and social-media brands such as Twitter Inc.
How did major indexes fare?
The Dow Jones Industrial Average DJIA, -0.13% rose 145.34 points, or 0.6%, to 26,656.39, less than 1% away from its record. The S&P 500 index SPX, -0.08% added 25.71 points, or 0.9%, to 2,933.68, and the Nasdaq Composite COMP, -0.07% gained 105.56 points, or 1.3%, to 8,120.82.
What drove the market?
Earnings continued to dominate the market, with several Dow components such as Coca-Cola KO, -0.37% , Procter & Gamble Co. PG, +1.04% , United Technologies Corp. UTX, -0.39% and Verizon Communications Inc. VZ, +0.00% releasing quarterly results.
Shares of United Technologies rose 2.3% to lead the Dow higher after the company reported earnings and revenue that beat analyst expectations, while raising expectations for its full-year performance. Shares of Coke also boosted the blue-chip index, rising 1.7%, on better-than-expected earnings.
Twitter Inc. TWTR, -1.07% shares led the S&P 500’s charge into record territory, up 16% after the social media company reported user growth well beyond analyst forecasts.
On the economic front, new-home sales in March rose 4.5% to a seasonally adjusted annual rate of 692,000, the Commerce Department said.
On Monday, the energy sector had taken center stage after the U.S. said it was ending sanction waivers on imports of Iranian oil, granted to a number of countries, including China, India and Turkey, which were slated to terminate May 2. Because the tightened restrictions would remove nearly 1 million barrels of Iranian supplies from the market a day, it delivered a jolt to oil-pegged assets and produced sharp gains in the energy sector, as reflected in exchange-traded funds Energy Select Sector SPDR ETF XLE, -0.93% and United States Oil Fund LP USO, -0.07% .
What were analysts saying?
Potential new closing highs “are being driven by some really solid earnings reports today,” said Lindsey Bell, investment strategist with CFRA research.
For markets to keep hitting new highs, “You’re going to need to see tech really participate, following on Twitter this morning,” she added.
Bell pointed to Microsoft Corp. MSFT, -0.41% and Facebook Inc. FB, +0.04% as two companies that report earnings Wednesday, and whose results could go a long way in determining the stamina of the current rally.
“Overall, the [corporate] results indicate an improving world economy, particularly for big-ticket items on both the consumer and industrial spending sides, supporting investor interest in cyclical sectors like Consumer Discretionary, Industrials, Communications, and Technology,” wrote Colin Cieszynski, chief market strategist at SIA Wealth Management in a Tuesday research note.
What stocks were in focus?
P&G fell 2.7% after the maker of Oral-B, Pampers and Tide products issued a soft outlook for the full-year 2019.
Toy maker Hasbro Inc. HAS, +0.51% jumped 14% after the firm reported a surprise profit and growth in revenue.
Shares of Whirlpool Corp. WHR, -1.62% rose 0.4% after the appliance maker late Monday reported results that were better than analysts’ estimates.
Verizon shares fell 2.1% even after the communications giant beat first-quarter profit expectations and raised its outlook.
Lockheed Martin Corp. LMT, -0.70% shares rallied 5.7% after the aerospace and defense giant greatly surpassed estimates for the first quarter and raised its full-year guidance.
Shares of Harley-Davidson Inc. HOG, -2.90% fell 2% after the motorcycle manufacturer missed earnings estimates slightly.
How did other markets trade?
The Shanghai Composite SHCOMP, +0.09% fell 0.5% and the CSI 300 Index 000300, +0.28% declined 0.2%, while major European stock markets SXXP, -0.21% were mostly higher after coming off the Easter Monday holiday.
Gold prices GCM9, +0.11% settled lower while the ICE Dollar Index DXY, +0.16% rose against its peers, to a nearly two-year peak.