Dow Industrial Earnings Push U.S. Stocks Closer to Record Highs

The U.S. stock market advanced on Tuesday after a pair of Dow industrials reported better than expected earnings, easing concerns about a dismal quarter for Corporate America. In alternative markets, cryptocurrencies faced swift declines after bitcoin’s price swung back below $10,000.

Dow, S&P 500, Nasdaq Finish Higher

All three of Wall Street’s major indexes finished in positive territory, with the Dow Jones Industrial Average gaining 177.29 points, or 0.7%, to 27,349.19. The industrial benchmark was up by as much as 198 points.

Dow Jones Industrial Average returns to record territory following 177-point rally. | Source: Stockcharts.com

The broad S&P 500 Index of large-cap stocks gained 0.7% to close at 3,005.47. Ten of 11 sectors reported gains, led by materials, which added 1.9%. Shares of financials, industrials and real estate companies also outperformed the market, rising at least 1%.

The technology-focused Nasdaq Composite Index climbed 0.6% to finish at 8,251.40.

Earnings Surprise to the Upside

Dow blue-chip Coca-Cola Co (NYSE:KO) reported better than expected earnings on Tuesday thanks to higher sales of its flagship product. The company’s second-quarter adjusted earnings per share came in at 63 cents on revenues of $10 billion. Analysts in a median estimate had called for an EPS of 61 cents on revenue of $9.99 billion.

Coke’s stock price rose 6% on Tuesday to $54.33.

United Technologies (NYSE:UTX), another Dow component, also posted better than expected quarterly results. The industrial conglomerate turned a profit of $2.20 per share on $19.6 billion in sales. The company’s stock finished up 1.5% at $134.94.

As of Tuesday, 18% of S&P 500 companies had reported second-quarter earnings. Among them, 78% have reported stronger than expected profits, according to FactSet These companies have seen their earnings climb by an aggregate 3.6%. Before earnings season began, analysts at FactSet predicted a profit decline of 3% for S&P 500 companies.

Crypto Markets Slump

Bitcoin and Tron led a broad reversal in the cryptocurrency market on Tuesday, as total coin values lost a combined $12 billion. The market bottomed around $272 billion before recovering slightly in afternoon trading.

Crypto markets decline sharply on Tuesday following bitcoin’s technical correction. | Source: CoinMarketCap.

Tron was down more than 22% at one point after a Chinese news site accused its founder, Justin Sun, of several improprieties ranging from illegal fundraising to money laundering. Sun has strongly denied the rumors.

Bitcoin continued to exert a strong gravitational pull on the broader market after its price fell below $10,000 for the second time in as many weeks. The bitcoin price reached an intraday low of $9,860.80 on Bitstamp and struggled to regain the five-figure level for most of the session.

The leading digital currency would eventually return above $10,100, having erased most of its intraday losses.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via Stockcharts.com and CoinMarketCap.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi