The major U.S. stock indexes finished mostly higher Tuesday as investors welcomed strong corporate earnings reports from Google parent Alphabet and other companies.
Gains by technology and healthcare companies outweighed losses by consumer goods manufacturers, retailers and others.
Smaller-company stocks, which have been beating the rest of the market this year, turned sharply lower as investors weighed the implications of the Trump administration’s decision to send billions of dollars in emergency aid to farmers that are hurting from tariffs stemming from the U.S.-China trade war.
Tariffs also weighed on Whirlpool’s latest quarterly results, giving the appliance maker its worst day in more than 30 years.
“Investors are focused on the good news on earnings and the economy, but they’re still a bit cautious when it comes to the market moving higher, and that’s because of all the news flow on geopolitical events and tariffs,” said Jeff Kravetz, regional investment strategist at U.S. Bank Private Wealth Management.
The Standard & Poor’s 500 index rose 13.42 points, or 0.5%, to 2,820.40. The Dow Jones industrial average climbed 197.65 points, or 0.8%, to 25,241.94. The Nasdaq composite slipped 1.11 points to 7,840.77. The Russell 2000 index of smaller-company stocks had its worst day in a month, dropping 18.22 points, or 1.1%, to 1,680.20.
More stocks fell than rose on the New York Stock Exchange. The S&P 500, the market’s benchmark index, has risen three consecutive weeks.
Alphabet climbed 3.9% to $1,258.15 after the tech giant reported second-quarter earnings late Monday that topped Wall Street’s expectations, even as it booked a $5.1-billion charge to cover a fine levied by European regulators.
Harley-Davidson jumped 7.7% to $44.63 after the motorcycle manufacturer’s latest quarterly earnings came in well ahead of what analysts expected. The company also said it was planning strategic changes as tariffs affect its business.
Healthcare-sector stocks got a lift from a couple of companies that reported strong quarterly results. Biogen rose 4.1% to $372.84. The drugmaker also raised its forecast for the year. Eli Lilly & Co., which in addition to reporting solid earnings said it would spin off its animal health business, rose 5% to $93.35.
This is the busiest week of the second-quarter earnings season, with roughly a third of companies in the S&P 500 scheduled to report, including Amazon, Facebook, Boeing and Ford. Of the 17.4% of the companies in the S&P 500 that had issued quarterly results as of Monday, about 71% reported earnings and revenue that beat analysts’ forecasts, according to S&P Global Market Intelligence. That’s reinforced the underlying perception in the financial markets that the U.S. economy is performing strongly and that the Federal Reserve will raise interest rates again next month.
Even so, traders remain wary of global trade tensions, which have ratcheted up in recent weeks as the Trump administration has sought to renegotiate trade pacts with China, Canada and European nations, resorting to imposing tariffs on imports of aluminum, steel and other goods. The strategy has prompted U.S. trading partners to retaliate, creating risks for the economy.
On Tuesday, the Trump administration announced a $12-billion plan to assist farmers who have been hurt by President Trump’s trade disputes with China and other trading partners. The plan, which focuses on Midwest soybean producers and others targeted by retaliatory measures, would include direct assistance for farmers, purchases of excess crops and trade promotion activities aimed at building new export markets.
The move sent shares in several agriculture companies higher. Farming equipment manufacturer Deere & Co. rose 3.2% to $139.84. Fertilizer maker Mosaic advanced 2.3% to $29.02.
The aid plan also prompted the selloff in small-company stocks, which tend to be more domestically focused and had climbed in recent months as the dollar got stronger and investors worried about trade. Those conditions changed after the White House proposed its aid package, said Quincy Krosby, chief market strategist at Prudential Financial.
“Seeing the government offer aid to the farmers perhaps has given the market a bit of a belief that if any other sector or subsector ... gets hurt temporarily by these ongoing trade issues, perhaps they too will receive aid,” she said.
Whirlpool isn’t expecting much relief from the effects of U.S. tariffs on steel and aluminum imports. In a filing, the company blamed higher raw materials costs on the tariffs and said that it expects more of the same in the second half of 2018. That could require Whirlpool to modify its business practices and could have “a material adverse effect on our financial statements in any particular reporting period,” the company said. Its stock dived 14.5% to $128.82.
Bond prices rose. The yield on the 10-year Treasury fell to 2.95% from 2.96%.
Benchmark U.S. crude climbed 63 cents, or 0.9%, to settle at $68.52 a barrel in New York. Brent crude, used to price international oils, rose 38 cents to $73.44 a barrel in London.
The rise in oil prices helped lift energy stocks. Pioneer Natural Resources rose 3.2% to $187.08.
The dollar fell to 111.22 yen from 111.48 yen. The euro weakened to $1.1683 from $1.1689.
Gold slipped 10 cents to $1,225.50 an ounce. Silver rose 10 cents to $15.52 an ounce. Copper rose 6 cents to $2.81 a pound.
In other energy futures trading, heating oil rose 1 cent to $2.13 a gallon. Wholesale gasoline was little changed at $2.09 a gallon. Natural gas rose 1 cent to $2.73 per 1,000 cubic feet.
Markets in Europe finished solidly higher despite a survey that indicated economic growth across the 19-country Eurozone moderated at the start of the third quarter. Major indexes in Asia also rose.
2:50 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 7:35 a.m.