You are here
US: S&P 500 posts highest close since Feb 1; PepsiCo a boost
[NEW YORK] The S&P 500 rose for a fourth session on Tuesday to post its highest close since Feb 1, the day before the market began a sharp extended selloff, as strong results from PepsiCo boosted optimism about the earnings season.
The consumer staples index climbed 1.3 per cent and provided the biggest lift to the S&P 500, driven by PepsiCo , which gained 4.8 per cent, while Procter & Gamble rose 2.5 per cent and Coca-Cola was up 1.3 per cent.
The benchmark index is now up 4.5 per cent since the end of 2017, rising about 3 per cent in the four sessions, helped by upbeat news on the economy and earnings.
Worries over rising bond yields and potentially firming inflation drove the early February selloff, which confirmed a correction for the market.
Earnings are expected to become key for investors in the coming weeks as the US reporting period kicks into high gear, shifting the focus away from recent trade tensions. The United States and China slapped tit-for-tat tariffs on US$34 billion of each other's goods on Friday.
"They sold into it (the tariff news), and then it bounced back nicely," said Alan Lancz, president of Alan B Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio.
JPMorgan Chase, Wells Fargo and Citigroup are scheduled to report results on Friday. Their shares dipped on Tuesday after leading market gains on Monday.
The Dow Jones Industrial Average rose 143.07 points, or 0.58 per cent, to 24,919.66, the S&P 500 gained 9.67 points, or 0.35 per cent, to 2,793.84 and the Nasdaq Composite added 3.00 points, or 0.04 per cent, to 7,759.20.
PepsiCo's shares surged after the company's quarterly results topped estimates on strong sales of snacks.
The company also reaffirmed its full-year forecast amid signs of a gradual recovery in its soda business.
Overall, S&P 500 companies are expected to post second-quarter profit growth of around 21 per cent, slightly higher than what was forecast in April, according to Thomson Reuters data.
Investors are still, however, expected to parse quarterly reports to gauge the impact of an escalating trade dispute between China and the United States on company earnings.
Also boosting the S&P on Tuesday, utilities and telecom indexes rose about one per cent each, bouncing back from Monday's losses.
Higher oil prices lifted energy shares. The S&P energy index rose 0.7 per cent as crude oil prices gained on growing supply disruptions in Norway and Libya, but gains were pared after the United States said it would consider requests for waivers from Iranian oil sanctions.
Shares of Exxon and Chevron were up around one per cent each.
Nordstrom dropped 2.7 per cent after the upscale department store operator issued a bleak sales forecast for the rest of 2018.
Advancing issues outnumbered declining ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favoured decliners.
The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 104 new highs and 26 new lows.
About 5.8 billion shares changed hands on US exchanges. That compares with the 7.0 billion daily average for the past 20 trading days, according to Thomson Reuters data.