Las Vegas Sun

October 21, 2017

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US stocks back to records as corporate profits keep rising

NEW YORK — U.S. stock indexes returned to their winning ways Tuesday, and the Standard & Poor's 500 index headed for a record after corporate profits continued to come in better than analysts expected. McDonald's and Caterpillar were among the big companies reporting healthier-than-forecast earnings.

Higher prices for oil, metals and other commodities helped to lift energy and raw-materials companies, while tech stocks took a rare step backward after results for Seagate Technology and others in the industry fell short of expectations.

Treasury yields rose as the Federal Reserve begins a two-day meeting on interest-rate policy.

KEEPING SCORE: The Standard & Poor's 500 index rose 8 points, or 0.3 percent, to 2,478, as of 10:45 a.m. Eastern time. If the gain holds, it would be the first for the index in four days and return it to an all-time high.

The Dow Jones industrial average added 106, or 0.5 percent, to 21,619. The Nasdaq composite slipped 5 points, or 0.1 percent, to 6,405.

EARTH MOVING: Caterpillar jumped $5.76, or 5.3 percent, to $113.95 after reporting better results for the latest quarter than analysts expected. It also raised its forecast for revenue and profit for the full year, citing increased demand across many of its markets.

PILING HIGHER: McDonald's rose $5.25, or 3.5 percent, to $157.10 after its revenue and earnings for the latest quarter topped Wall Street's forecast. The burger chain has been drawing in customers with a new line of premium of burgers and $1 sodas.

TECH STUMBLE: Technology stocks have been the year's biggest stars so far, as investors have been hungry for anything with the potential to grow quickly in a slow-growing global economy.

But tech stocks in the S&P 500 dipped 0.2 percent after several reported results that fell short of expectations.

Seagate Technology sank $6.26, or 15.7 percent, to $33.50 after the maker of hard drives and other electronic data storage reported weaker revenue and earnings than analysts had forecast.

MORE ENERGETIC: The price of crude was on track to rise by more than 1 percent for a second straight day, and shares of oil producers and other energy companies benefited.

Energy stocks in the S&P 500 rose 1.8 percent, most among the 11 sectors that make up the index. Devon Energy rose $1.25, or 3.9 percent, to $32.99, and Marathon Oil climbed 96 cents, or 3.4 percent, to $29.14.

Benchmark U.S. crude rose $1.01, or 2.2 percent, to $47.35 per barrel. Brent crude, the international standard, rose 94 cents, or 1.9 percent, to $49.76.

COMMODITIES: Metals prices also rose strongly, which helped to lift shares of mining companies and other raw-material producers.

Copper jumped 8 cents, or 3.1 percent, to $2.82 per pound, while silver rose 4 cents to $16.48 per ounce and gold slipped $2.50 to $1,251.80 per ounce.

Miner Freeport-McMoRan had the biggest gain among stocks in the S&P 500. It rose $1.70, or 13.1 percent, to $14.66. Newmont Mining had the second-biggest jump, up $2.53, or 7.5 percent, to $36.43.

YIELDS: The yield on the 10-year Treasury note rose to 2.30 percent from 2.26 percent late Monday. The two-year yield climbed to 1.37 percent from 1.36 percent, and the 30-year yield rose to 2.90 percent from 2.83 percent.

FINANCIAL STRENGTH: Banks and other companies in the financial industry were strong following the rise in yields. Higher interest rates can help banks make bigger profits through lending. Financial stocks in the S&P 500 rose 1.2 percent.

FED MEETING: The Federal Reserve's policymaking committee is beginning a two-day meeting, but investors expect to see few fireworks when it announces its decision on interest rates Wednesday.

The central bank has already raised rates three times since December, and most investors expect the next rate increase to come later this year or in 2018.

CURRENCIES: The euro rose to $1.1666 from $1.1645 late Monday. The dollar inched up to 111.57 Japanese yen from 111.11 yen, and the British pound rose to $1.3046 from $1.3036.

MARKETS ABROAD: France's CAC 40 climbed 1 percent, Germany's DAX gained 0.6 percent and the FTSE 100 in London rose 1 percent.

Japan's Nikkei 225 index slipped 0.1 percent, South Korea's Kospi index dipped 0.5 percent and the Han Seng in Hong Kong was virtually flat.