U.S. Stocks Move Mostly Higher On Upbeat Earnings News

(RTTNews) - Stocks turned in a relatively lackluster performance early in the session on Tuesday but have moved mostly higher over the course of the trading day. The major averages have all moved to the upside, with the tech-heavy Nasdaq leading the advance.

Currently, the major averages are just off their highs of the session. The Nasdaq is up 121.50 points or 0.9 percent at 14,180.36, the S&P 500 is up 18.85 points or 0.4 percent at 4,573.49 and the Dow is up 79.08 points or 0.2 percent at 35,490.32.

The strength that has emerged on Wall Street partly reflects a positive reaction to the latest batch of earnings news from big-name companies.

The Dow is on pace to extend its winning streak to twelve days amid strong gains by 3M (MMM) and Dow Inc. (DOW), which are surging by 5.3 percent and 2.5 percent, respectively.

The advance by 3M comes after the industrial conglomerate reported better than expected second quarter results and raised its full-year profit forecast.

Chemical giant Dow is also jumping after reporting second quarter results that exceeded expectations on both the top and bottom lines.

Shares of General Electric (GE) have also moved sharply higher after the industrial giant reported better than expected second quarter earnings and boosted its full-year profit guidance.

"Wall Street is about one-fourth done with earnings season and so far most of the important corporate updates have delivered better-than-expected results," said Edward Moya, senior market analyst at OANDA.

He added, "In the S&P 500, 76% of the companies that reported delivered EPS beats, while 62% had better-than-expected revenue results."

Traders also remain optimism about the Federal Reserve wrapping up its recent series of interest rate hikes ahead of Wednesday's monetary policy decision.

The Fed is widely expected to raise interest rates by another 25 basis points, but traders are hopeful the rate hike will be the last following recent encouraging inflation data.

"Investors are clearly signaling that they expect this week's announcement to mark the end of the rate-hiking cycle, followed by a series of aggressive rate cuts next year," said John Lynch, Chief Investment Officer for Comerica Wealth Management.

He added, "While we also believe that this week's announcement might be the final hike, we are less optimistic about the Fed's willingness to make a dramatic dovish pivot next year as the futures market suggests."

In U.S. economic news, the Conference Board released a report showing U.S. consumer confidence improved by much more than expected in the month of July.

The Conference Board said its consumer confidence index jumped to 117.0 in July from an upwardly revised 110.1 in June. Economists had expected the index to climb to 111.8 from the 109.7 originally reported for the previous month.

With the much bigger than expected surge, the consumer confidence index reached its highest level since July 2021.

Sector News

Steel stocks are extending the rally seen on Monday amid optimism about additional Chinese stimulus, with the NYSE Arca Steel Index spiking by 3.6 percent to a new four-month intraday high.

Computer hardware, semiconductor and software stocks are also seeing considerable strength, contributing to the advance by the tech-heavy Nasdaq.

Chemical stocks have also moved significantly higher following the upbeat earnings news from Dow, driving the S&P Chemical Sector Index up by 1.5 percent.

Housing and gold stocks are also seeing notable strength while airline stocks have moved sharply lower, dragging the NYSE Arca Airline Index down by 2.8 percent.

Alaska Air (ALK) is posting a steep loss even though the airline reported second quarter results that beat analyst estimates on both the top and bottom lines.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. China's Shanghai Composite Index surged by 2.1 percent and Hong Kong's Hang Seng Index spiked by 4.1 percent, although Japan's Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent.

Meanwhile, the major European markets finished the day narrowly mixed. While the French CAC 40 Index slipped by 0.2 percent, the German DAX Index crept up by 0.1 percent and the U.K.'s FTSE 100 Index rose by 0.2 percent.

In the bond market, treasuries are seeing further downside after turning lower over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.3 basis points at 3.900 percent.