New York: US stocks traded higher on Tuesday as investors digested a batch of corporate earnings reports as well as key economic data.
The Dow Jones Industrial Average increased 196.35 points, or 0.78 per cent, to 25,240.64. The S&P 500 was up 13.86 points, or 0.49 per cent, to 2,820.84, Xinhua news agency reported.
The Nasdaq Composite Index gained 19.49 points, or 0.25 per cent, to 7,861.36.
Google parent company Alphabet reported stronger-than-forecast quarterly results on Monday after the closing bell. The company posted adjusted earnings per share of $11.75 and revenue of $32.66 billion, both topping Wall Street’s estimates.
This earnings season has been great so far. Second quarter earnings are expected to increase 22 per cent from the same period last year. Excluding the energy sector, the earnings growth estimate declines to 18.2 per cent.
Of the 500 companies in the S&P 500 that had reported earnings by July 20, 83.9 per cent reported earnings above analyst expectations. This was above the long-term average of 64 per cent and above the prior four quarter average of 75 per cent.
The second-quarter blended revenue growth estimate is 8.3 per cent. Excluding the energy sector, the revenue growth estimate declines to 7.2 per cent. And 73.6 per cent of companies have reported revenue above analyst expectations.
This is above the long-term average of 60 per cent and above the prior four quarter average of 72 per cent.
On the economic front, the seasonally adjusted IHS Markit Flash US Composite PMI Output Index posted 55.9 in July, down slightly from 56.2 in June and the lowest reading for three months.