Solid Earnings Lift Dow Jones to New Record

The Dow Jones Industrial Average scored new highs on Tuesday, thanks to upbeat earnings from Caterpillar Inc. (CAT) and 3M Co (MMM).

Blue-Chips Rally

The Dow 30 index added 167.80 points, or 0.7%, to close at 23,441.76, marking its 54th record close of the year. It was also the index’s seventh advance in the past eight days.

The large-cap S&P 500 Index added 0.2% to close at 2,569.13, with seven of 11 sectors finishing in positive territory. Financials were the best performers, climbing 0.7%, while materials and industrials adding at least 0.5%.

Technology stocks also advanced in Tuesday trading, leading the Nasdaq Composite Index higher. The tech-heavy gauge closed up 0.2% at 6,598.43.

Despite the gains, volatility hovered at six-week highs, with the CBOE VIX adding 0.8% to close at 11.16. The so-called “fear index” spiked 11% on Monday as Wall Street snapped a six-day winning streak.

Earnings Deliver

A stellar earnings report from Caterpillar set the tone on Tuesday. The heavy-machinery manufacturer posted quarterly profit of $1.77 per share, up from a mere 48 cents in the same quarter last year and well ahead of forecasts for $1.27. At $11.4 billion, the company posted a 2% billion increase in revenue for the September quarter. That was well above forecasts calling for $10.6 billion.

The company’s Asia Pacific operation posted impressive growth, a sign that the big digger’s bet on China was paying off. The world’s second-largest economy has performed above-potential for the better part of a year thanks to reliance on traditional smoke-stack industries.

Shares of 3M Co jumped the most in eight years after the company reported broad revenue growth. The Dow blue-chip posted per-share earnings of $2.33 on revenues of $8.17 billion.

The multinational conglomerate said adjusted per-share earnings will be between $9 and $9.10 this year, well ahead of forecasts calling for $8.97.

Economic Data

The U.S. economy shifted into higher gear in October, or so says Markit’s preliminary PMI report. The flash Composite purchasing managers’ index came in at 55.7, the highest in nine months.

Growth was reported across the services and manufacturing industries. Markit’s services gauge rose to 55.9, while its manufacturing PMI climbed to 54.5.

On the PMI scale, figures above 50 imply growth.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, 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