S&P hits four-month high on oil, Pepsi boost
(Reuters) – U.S. stocks rose on Tuesday, with the S&P 500 hitting a four-month high, boosted by higher oil prices and strong results from PepsiCo.
PepsiCo’s shares rose 4.3 percent after the company’s quarterly revenue and profit topped analysts’ estimates, helped by strong sales in its Frito-Lay unit.
“The first major earnings report came out, and PepsiCo’s earnings beat expectations and that’s a good start for the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
PepsiCo helped drive a 0.61 percent gain in the consumer staples index. Rival Coca-Cola rose nearly 1 percent.
The energy index was the biggest gainer among the 11 major S&P sectors, jumping 1.39 percent as oil prices rose due to growing supply outages.
Shares of Exxon, Chevron and Schlumberger were all up around 1.5 percent.
Overall, S&P 500 companies are expected to post second-quarter profit growth of around 21 percent, slightly higher than what was forecast in April, according to Thomson Reuters data.
However, investors and analysts will parse quarterly reports to gauge the impact of China’s tariffs, which are expected to hit a range of U.S. companies.
On Tuesday, China raised “anti-dumping tariff rates” for some U.S.-made optical fiber products, effective July 11.
“The trade conflict is far from over and could eventually have a very negative impact on equities, but for now it is taking a back seat only because we are entering into the earnings season,” Cardillo said.
He also pointed to a “disappointing” report from the National Federation of Independent Business that showed U.S. small business confidence index fell 0.6 points to 107.2 in June as another sign that the trade dispute is worrisome for corporate America.
At 9:59 a.m. EDT, the S&P 500 was up 6.28 points, or 0.23 percent, at 2,790.45. The index rose to as much as 2,791.7 points, its highest since March 13.
The Dow Jones Industrial Average was up 116.62 points, or 0.47 percent, at 24,893.21 and the Nasdaq Composite was up 5.21 points, or 0.07 percent, at 7,761.41.
Tesla Inc rose 1.2 percent. The U.S. automaker signed agreements to open a plant in Shanghai with an annual capacity of 500,000 cars, local media reported.
Shares of Walgreens Boots Alliance dropped 1.3 percent after Evercore ISI cut its rating on the stock to “in line” from “outperform.”
Rating downgrades on eBay, Chipotle Mexican Grill and Cerner also pulled shares of the three S&P 500 components down between 1.6 percent and 3.4 percent.
Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.16-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and no new lows, while the Nasdaq recorded 60 new highs and eight new lows.
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