US stocks rise on earnings optimism; dollar advances

Bloomberg

US stocks rose as investors assessed a batch of strong earnings and signs of progress in trade talks with China. Treasuries fell and the dollar rose.
The S&P 500 climbed for a second day, though gains faltered as the index pushed back toward 3,000. Coca-Cola climbed to a record, while Lockheed Martin and United Technologies jumped after the trio posted earnings that topped estimates. PulteGroup, Zions Bancorp and Whirlpool all tumbled after results disappointed.
Strong earnings helped the Stoxx Europe 600 gain, with upbeat reports from heavyweights including UBS, Santander, Hermes and AMS.
“We’re seeing a little bit of a bifurcated economy in the underlying earnings at this point,” said Michael Reynolds, investment strategy officer at Glenmede Trust Co in Philadelphia.
The British pound stayed lower after Boris Johnson was officially named by the Conservative Party as PM Theresa May’s replacement. The dollar rose for a fourth day and Treasury yields were little changed.
While they may be confident in a deal to suspend the US debt ceiling and boost spending levels, investors are searching corporate earnings for signs of whether trade tensions are affecting profits.
In the meantime, the US and China are moving closer to resuming face-to-face trade talks, as purchases of American farm products and a ban on sales to China’s Huawei Technologies Co remain sticking points.
“The market will look to large multi-national companies as sort of bell-weathers,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance.
Elsewhere, oil stabilised after climbing 1.7 percent in two days as tensions in the Persian Gulf tapered and a tepid demand outlook kept gains at bay. All but four listings on China’s Nasdaq-style equity market, Star board, dropped after posting big gains on Monday’s debut.
Earnings season rolls on with companies including Amazon.com, Alphabet, Unilever, Caterpillar, McDonald’s and Boeing still to report this week.
Thursday brings the European Central Bank policy decision. Economists widely expect officials to signal their readiness to cut interest rates and potentially broaden stimulus. Some see the chance of an immediate rate cut.
The S&P 500 Index rose 0.3 percent in New York. The Nasdaq Composite Index gained 0.2 percent and the Dow Jones Industrial Average climbed 0.4 percent. The Stoxx Europe 600 gained 1.2 percent, the third straight gain. The MSCI Emerging Market Index was little changed.The MSCI Asia Pacific Index rose 0.3 percent.
The Bloomberg Dollar Spot Index rose 0.3 percent, the third consecutive gain. The euro declined 0.5 percent to $1.1156, while the yen weakened 0.2 percent to 108.11 per dollar.The British pound fell 0.2 percent to $1.2446.
The MSCI Emerging Markets Currency Index dropped 0.2 percent. The yield on 10-year Treasuries rose less than 1 basis point to 2.05 percent.