Stocks edge up, lifting the Nasdaq to a new record high

U.S. stocks eked out small gains Tuesday, nudging the Nasdaq composite to its second record close in less than a week.

The three major stock indexes, all of which set new highs Friday, rebounded from Monday’s slight decline.

Investors focused on the latest batch of company earnings, bidding up healthcare, telecommunications and consumer-focused companies most.

Energy was the biggest laggard, as crude oil prices closed lower, backtracking after an early rally. Traders also sold off shares in big department store chains after Gap reported lower sales figures.

With nearly 90% of S&P 500 companies having already reported, earnings this quarter have been OK, and revenue growth has not been as bad as expected, said Bob Doll, chief equity strategist at Nuveen Asset Management.

“We’re slowly turning the corner and exiting [the] earnings recession,” Doll said. “The worst quarter, year-over-year, was the first quarter. While the second quarter wasn’t great, it was less bad. The third and fourth quarters will continue that.”

The Dow Jones industrial average inched up 3.76 points, or 0.02%, to 18,533.05. The Standard & Poor’s 500 index rose 0.85 of a point, or 0.04%, to 2,181.74. The Nasdaq composite index advanced 12.34 points, or 0.2%, to 5,225.48. That’s up less 0.1% from its most recent high Friday.

For the year, the Dow is now up 6.4%, while the S&P is up 6.7% and the Nasdaq is up 4.4%.

The stock market has bounced back in recent weeks, buoyed by strong job growth in the U.S., improved company earnings and persistently low inflation and interest rates.

“That all equals support for the market, but then the reality is where do we go from here?” said Mike Baele, senior portfolio manager with U.S. Bank’s Private Client Reserve.

On Tuesday, U.S. stocks got an early boost from a rally in European markets and in Asia, where most of the indexes closed higher.

Data out of China showing that consumer price growth declined in July for the third month in a row helped fuel expectations among investors that Beijing will pump out more stimulus in a bid to soften the slowdown in the world’s second-largest economy.

In the U.S., stock indexes edged higher until about mid-afternoon, when crude oil prices reversed course after an early surge. The indexes wavered between small gains and losses the rest of the day before they turned higher in the final minutes of trading.

Traders bid up shares in several companies that posted strong quarterly results.

Endo International vaulted 21.8% to $22.16 a day after the Ireland-based medical device maker reported that it returned to profitability in the second quarter.

Valeant Pharmaceuticals surged 25.4% to $28.16 after the Canadian drugmaker reaffirmed its earnings outlook for the year, despite reporting a wider second-quarter loss. The company also said it is undergoing a restructuring.

Chemicals company Chemours and solar energy seller Vivint Solar also rose after posting better-than-expected earnings. Chemours advanced 10.6% to $10.30. Vivint climbed 9.4% to $3.49.

Motorcar Parts of America soared 15.9% to $32.92 after the Torrance auto parts maker disclosed a larger profit than analysts expected.

Retailers didn’t fare as well.

Gap sank 6.3% to $24.01 after reporting lower sales in the second quarter and in July. Kohl’s slumped 4.2% to $37.70. Target slid 3.2% to $72.61.

Home furnishing store Wayfair drooped 19.6% to $38.80 after posting a wider-than-expected loss in the second quarter.

Impax Laboratories didn’t do so well either, diving 23.4% to $23.43 after the Hayward, Calif., drugmaker reported a surprise drop in revenue as stiff competition hurt its sales of key generic drugs.

Investors shrugged off a Labor Department report indicating that American workers’ productivity unexpectedly fell in the second quarter.

An early rally in U.S. crude oil prices evaporated. Benchmark U.S. crude fell 25 cents, or 0.6%, to $42.77 a barrel. Brent crude, used to price international oils, slid 41 cents, or 0.9%, to $44.98 a barrel.

The slide in oil weighed on several oil and gas companies. NRG Energy fell 5.1% to $12.83, and Southwestern Energy shed 3.6% to $13.61. Chesapeake Energy declined 4% to $4.81.

In Europe, Germany’s DAX rose 2.5% and France’s CAC 40 gained 1.2%. Britain’s FTSE 100 advanced 0.6%.

Markets in Asia were mostly higher. Japan’s Nikkei 225 rose 0.7%. South Korea’s Kospi climbed 0.6%. Hong Kong’s Hang Seng index fell 0.1%, while China’s Shanghai Composite Index gained 0.7%.

Stocks in Australia, Taiwan and the Philippines were higher.

In other energy trading, wholesale gasoline fell 2 cents to $1.35 a gallon, heating oil slipped a penny to $1.33 a gallon and natural gas fell 13 cents, or 4.8%, to $2.62 per 1,000 cubic feet.

In metals trading, the price of gold rose $5.40, or 0.4%, to $1,347 an ounce. Silver advanced 5 cents, or 0.2%, to $19.85 an ounce. Copper fell 2 cents, or 0.7%, to $2.15 a pound.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.55% from 1.59%.

In currency markets, the dollar fell to 101.90 yen from 102.47 yen and the euro strengthened to $1.1107 from $1.1083.

UPDATES:

3:30 p.m.: This article has been updated with additional information.

1:35 p.m.: This article has been updated with the close of markets in New York.

This article was originally published at 8:25 a.m.