NEW YORK -- U.S. stocks rose Tuesday after strong results from industrial and health care companies as well as a report that the U.S. and China are trying to restart trade talks. Small companies rallied.
The S&P 500 index rose 13.69 points, or 0.5 percent, to 2,816.29, making up most of the losses it took on Monday. The Dow Jones industrial average gained 108.36 points, or 0.4 percent, to 25,415.19. The Nasdaq composite added 41.78 points, or 0.5 percent, to 7,671.79. The Russell 2000 index of smaller-company stocks jumped 17.67 points, or 1.1 percent, to 1,670.80.
Bloomberg News reported that representatives of the U.S. and China are looking for ways to open new talks to end their trade war. The report cited two people familiar with those efforts and said there was no agreement about a time frame for talks or what issues would be discussed. Earlier this month, both nations placed import taxes on $34 billion worth of goods, and they've been threatening more severe measures.
The trade dispute could affect sales for many industrial companies, and new tariffs on aluminum and steel imports are also sending costs for those companies higher. Companies including Deere and Caterpillar jumped while engine-maker Cummins rose after its second-quarter report.
Vincent Reinhart, chief economist at Standish Mellon, a unit of BNY Mellon Asset Management, said investors have mostly stayed calm during the trade dispute because they think most of the tensions will get worked out by November. Rising corporate profits, which have been aided by the recent tax cuts, are also helping.
"Everybody thinks a deal will be cut before the midterms," he said. "That allows you to shake off the bad news and embrace the good."
Earnings from companies including Pfizer and Illumina gave health care stocks a boost, and real estate companies climbed as well. Banks were left out of the rally as interest rates slipped.
Deere, a farm-equipment-maker whose profits would be hurt by China's tariffs on soybeans, surged 4.8 percent to $144.79. Engine-maker Cummins gained 4.1 percent to $142.81 after a better-than-expected second-quarter report. After a slump on Monday, construction-equipment-maker Caterpillar rose 2.9 percent to $143.80.
Illumina, a maker of genetic testing tools, raised its forecasts after a strong second quarter and its stock climbed 12.1 percent to $324.36. Pfizer rose 3.5 percent to $39.93 after the biggest U.S. drugmaker topped analysts' projections and raised its forecasts for the year.
Elsewhere, cable company Charter Communications advanced 3.6 percent to $304.58 after its quarterly profit surpassed analysts' estimates.
High-powered-laser maker IPG Photonics nose-dived 26.9 percent to $164.04 after it said demand from Europe and China worsened during the second quarter. The company's revenue forecast for the current quarter fell far short of Wall Street's estimates.
Apple climbed 2.5 percent to $195.14 in after-hours trading after reporting that its third-quarter profit and sales both topped analysts' projections. Its fourth-quarter sales forecast was also better than expected.
The Commerce Department said consumer spending grew another 0.4 percent in June, and a key measurement of inflation is up 2.2 percent over the last year. For the last four months, inflation has equaled or been slightly higher than the Federal Reserve's target of 2 percent. The Fed is meeting today but isn't expected to raise interest rates again until later this year.
Business on 08/01/2018