Dow Industrials Surge on Strong Earnings from Caterpillar, 3M
24 Oktober 2017 - 7:08PM
Dow Jones News
By Michael Wursthorn and Georgi Kantchev
-- U.S. stocks rise as strong earnings support major indexes
-- Caterpillar, 3M boost Dow industrials
-- Shares in Europe edge lower, while Asia stocks rise
The Dow Jones Industrial Average surged Tuesday, as robust
corporate earnings helped put the blue-chip index on track for
another record close.
The Dow industrials gained 196 points, or 0.8%, to 23472 in
recent trading. The S&P 500 rose 0.2%, while the Nasdaq
Composite added 0.3%.
Better-than-expected earnings results from Caterpillar and 3M
among others helped support major indexes after stocks had fallen a
day earlier. Strong results from U.S. companies, as well as solid
economic growth around the world, have underpinned stock markets
and helped push them to record highs.
"We continue to see a strong improvement in earnings," said
Celia Dallas, chief investment strategist at Cambridge Associates.
While valuations continue to be a concern, Ms. Dallas cautioned
that investors shouldn't limit their exposure U.S. stocks too much
yet. "U.S. equities tend to be more defensive when you get into
periods of stress," relative to stocks elsewhere in the world, she
said.
Shares of Caterpillar jumped 4.8% after the company posted
stronger-than-expected revenue and profit growth and boosted its
outlook for the year.
Meanwhile, 3M, the maker of Post-it Notes, Ace bandages and
Scotch-Brite cleaning pads, reported higher profit and revenue that
exceeded analysts' expectations, while also raising its outlook.
Shares of 3M rose 7.6%.
Together, the two companies contributed more than 150 points to
the Dow industrials' gain.
About 24% of the companies in the S&P 500 have reported
actual results for the third quarter so far, with this week slated
to be one the busiest, according to FactSet. By the end of Friday,
more than half of the major index's companies will have reported
results for the most recent quarter, FactSet says.
"There's still room left for equities to move higher," said
Brent Schutte, chief investment strategist at Northwestern Mutual
Wealth Management Co. "It'll just be at a lesser pace."
Central banks are another focus for investors this week. The
European Central Bank is expected to announce changes to its
massive bond-buying program after its meeting Thursday. Economists
expect the ECB to reduce its monthly asset purchases, possibly by
half, but also to extend the program for a number of months into
2018.
Investors "need to exercise caution as markets enter a different
phase with less central bank support than has been the case over
the past decade," said David Simner, portfolio manager at Fidelity
International.
U.S. President Donald Trump is also expected to unveil his pick
for the new leader of the Federal Reserve within the next 10 days
from a roster of candidates that include current Fed Chairwoman
Janet Yellen.
A hawkish candidate might send U.S. Treasury yields higher and
boost the dollar, analysts say. The yield on the 10-year U.S.
Treasury note rose to 2.410%, according to Tradeweb, from 2.375%
Monday. Yields rise as prices fall.
In currencies, the WSJ Dollar Index, which tracks the dollar
against a basket of 16 currencies, was up 0.2%.
Elsewhere, the Stoxx Europe 600 index fell 0.4%. The Shanghai
Composite Index finished up 0.2%. Japan's Nikkei Stock Average
extended its record-setting streak of daily gains to 16 by closing
up 0.5%.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
October 24, 2017 12:53 ET (16:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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