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Solid company earnings power a broad rally for stocks

Wall Street
A Wall Street address on the side of a building.
(Mark Lennihan / Associated Press)

Stocks notched solid gains on Wall Street on Tuesday as investors welcomed surprisingly good quarterly results from some of the nation’s biggest companies.

The Standard & Poor’s 500 index climbed 29.53 points, or 1%, to 2,995.68. The benchmark index is now 1% below its all-time high set in July.

The Dow Jones industrial average rose 237.44 points, or 0.9%, to 27,024.80. The Nasdaq gained 100.06 points, or 1.2%, to 8,148.71. Small-company stocks also bounced back after leading the decline a day earlier.

Strong earnings from UnitedHealth Group, JPMorgan Chase and other companies helped power the market’s broad gains, erasing modest losses from a day earlier.

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Investors are looking to the wave of quarterly report cards due out over the next few weeks to give them a clearer picture of what effect the trade war between the U.S. and China is having on corporate profits and the broader economy.

The encouraging earnings reports came with a spate of surprisingly good forecasts for the rest of the year, which helped ease concerns about a slowdown because of the costly trade conflict.

On Friday, the U.S. agreed to suspend a planned increase in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products. The U.S. did not, however, cancel plans for more tariffs in December, and the sticking points of intellectual property and trade secrets still hang over the dispute.

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Bond prices fell. The yield on the 10-year Treasury rose to 1.77% from 1.75% late Friday. Bond markets were closed Monday for Columbus Day.

Technology, healthcare, financial and communication services stocks drove much of Tuesday’s broad rally, which gave the market its fourth gain in five trading sessions. Utilities and makers of consumer goods fell as investors regained an appetite for more risk. The sectors are considered safe-play holdings and usually lag the market when investors are more confident.

UnitedHealth Group jumped 8.2%, leading all S&P 500 stocks, after the company raised its 2019 profit forecast following third-quarter results that beat Wall Street’s expectations. Anthem gained 6%, Cigna added 5.7% and Humana rose 4.8%. Johnson & Johnson gained 1.6% after it raised its profit forecast for the year following solid third-quarter results.

JPMorgan Chase rose 3% after the bank beat Wall Street’s third-quarter profit forecasts. Citigroup also delivered solid results, lifting its shares 1.4%.

Other major banks, including Goldman Sachs and Wells Fargo, reported mixed results, but their shares still rose. Goldman Sachs added 0.3%, while Wells Fargo gained 1.7%.

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Investors are in for a busy few days for corporate earnings, including those of Bank of America, railroad giant CSX, Netflix and IBM on Wednesday.

Benchmark crude oil fell 78 cents to $52.81 a barrel. Brent crude oil, the international standard, dropped 61 cents to $58.74 a barrel.

Gold fell $14.10 to $1,477.60 an ounce, and silver fell 32 cents to $17.31 an ounce.

The dollar rose to 108.84 Japanese yen from 108.37 yen Monday. The euro strengthened to $1.1035 from $1.1031.


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