Wall Street gains; investors expect strong earnings

Irving Hamilton
July 10, 2018

USA stock index futures rose on Tuesday, as focus turned to the US corporate earnings season that kicks off this week, while worries of a trade dispute took a back seat in the wake of encouraging economic data.

Industrial, energy and consumer discretionary shares also rose sharply, while S&P utilities and telecommunications - among the market's recent outperformers - led percentage declines.

Bank stocks were the biggest gainers, with the S&P banks index rising 2.3 percent, on track for its biggest percentage gain in over three months.

JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc are scheduled to report results on Friday, kicking off the second-quarter earnings season in earnest.

The S&P financial index rose 1.3 percent, providing the biggest boost to the main S&P index.

A stronger economy and plans for more buybacks are helping bank shares, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

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However, investors and analysts are expected to focus on the impact of trade tensions on corporate profits this earnings season, as companies lay out their strategies to tackle such threats. The two countries slapped tit-for-tat tariffs on $34 billion of each other's goods on Friday. The S&P industrial sector jumped 1.8 percent.

At 9:49 a.m. ET the Dow Jones Industrial Average was up 193.11 points, or 0.79 percent, at 24,649.59, the S&P 500 was up 15.33 points, or 0.56 percent, at 2,775.15 and the Nasdaq Composite was up 46.97 points, or 0.61 percent, at 7,735.36.

The market has posted gains over the last several days following a strong jobs report and hopes that companies will report solid second-quarter results in the coming weeks.

USA analysts' estimates for S&P 500 second-quarter profit growth have risen slightly since April, putting the latest forecast at around 21 percent, according to Thomson Reuters data. The stock ended down 5.4 percent.

Advancing issues outnumbered decliners for a 2.53-to-1 ratio on the NYSE and a 2.16-to-1 ratio on the Nasdaq.

USA -listed shares of Chinese companies Alibaba, JD.com and Baidu climbed after KeyBanc recommendations on the stocks. But the benchmark S&P 500 closed up 0.84 percent on Friday as many analysts said the move was already priced in, but warned that further escalation could dent the appetite for stocks.

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