US: Tesla, rosy corporate news send Wall Street higher

[NEW YORK] Wall Street posted solid gains on Tuesday as investors continued to be buoyed by strong second quarter earnings.

Tesla CEO Elon Musk also sent the company's shares soaring with an announcement of plans to take the electric automaker private, helping push the broad-based S&P 500 close to a new all-time high.

The upward momentum came as markets continued to stabilise after an extended bout of turbulence from the US-China trade war.

The Dow Jones Industrial Average added 0.5 per cent to close at 25,628.91 while the S&P gained 0.3 per cent, putting it less than a percentage point away from the record high set at the end of January.

The tech-heavy Nasdaq also rose 0.3 per cent to close at 7,883.66.

Tom Cahill of Venture Wealth Management told AFP that 425 members of the S&P 500 had reported so far, beating earnings estimates by an average of five per cent each.

"This is phenomenal and the market will continue to go higher in the absence of any major bad news," he said.

Tesla surged nearly 11 percent - and was suspended during mid-afternoon trading - after Mr Musk jolted Wall Street with a tweet announcing Tesla was considering going private, and had the financing to do so.

The move could spare the company from investor scrutiny and other headaches that have seen share prices see-saw this year, he said.

Tech giants were among other stocks lifting the S&P 500. Amazon gained 0.8 per cent, Google-parent Alphabet jumped 1.4 per cent and Microsoft rose 0.7 per cent.

The international picture also added a measure of cheer, despite worsening trade relations between Washington and Beijing.

Emily Roland, head of capital markets research at John Hancock, said figures showed China's foreign currency reserves had risen last month.

"Many people expected it to decline. Investors applauded that because it means the Chinese authorities did not try to burn reserves to support their currency," she told AFP.

AFP