Wall Street gains; investors expect strong earnings

Cornelia Mascio
Luglio 11, 2018

Wall Street stocks rose for the fourth straight session on Tuesday (Jul 10) in anticipation of what is expected to be a strong corporate earnings season.

Industrial, energy and consumer discretionary shares also rose sharply, while S&P utilities and telecommunications - among the market's recent outperformers - led percentage declines.

Bank stocks were the biggest gainers, with the S&P banks index rising 2.3 percent, on track for its biggest percentage gain in over three months.

The S&P 500 and Nasdaq also made solid gains, up 0.9 per cent each.

Earnings season gets going in earnest Friday with reports from JPMorgan Chase and two other giant USA banks.

Although there are no immediate signs he US-China trade war is escalating, the key geopolitical risk is whether the United Kingdom is headed for a leadership challenge. The two countries slapped tit-for-tat tariffs on $34 billion of each other's goods on Friday.

"If it escalates, maybe it could become a problem but the angst going into last Friday was pretty significant, and now with just the realization that we're here and the world hasn't come to an end, and we're on the eve of what's going to be a dynamite earnings season, the money is falling in", Hellwig said.

Helping to boost the Dow, Caterpillar Inc rose 4.1 percent.

In US markets, the Dow Jones index jumped 320 points, or 1.3 per cent, to 24,777.

A Bank of America Merrill Lynch research report showed earnings per share for S&P 500 companies for 2018 was revised higher amid better-than-expected first-quarter results, higher oil prices and stronger-than-expected USA economic growth.

Overall, S&P 500 companies are expected to post second-quarter profit growth of around 21 percent, slightly higher than what was forecast in April, according to Thomson Reuters data.

Twitter sank after the Washington Post reported that the social media company suspended more than 70 million fake accounts in May and June, which analysts said could be negative for user growth. The stock was last down 5.4 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored decliners.

The S&P index recorded 17 new 52-week highs and no new lows, while the Nasdaq recorded 97 new highs and six new lows.

US -listed shares of Chinese companies Alibaba, JD.com and Baidu climbed after KeyBanc recommendations on the stocks. That compares with the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data.

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