NEW YORK (Reuters) – U.S. stocks rose on Tuesday as largely upbeat corporate results fueled investor optimism ahead of the highly awaited State of the Union address by President Donald Trump.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 4, 2019. REUTERS/Brendan McDermid
Technology and consumer discretionary shares, which have driven Wall Street’s advance in the current bull market, led the day’s gains.
Shares of Estée Lauder Cos Inc rose 12.6 percent after the cosmetics maker’s quarterly results, driven by strong growth in China, topped estimates. Estée Lauder shares had the largest percentage gain among the S&P 500 and boosted the index.
Luxury fashion company Ralph Lauren Corp also reported better-than-expected sales and earnings, sending the company’s shares 10.0 percent higher.
“The market continues to be driven by earnings,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “The fourth-quarter earnings season has been pretty strong.”
Alphabet Inc, which on Monday reported results that beat estimates, was a notable exception. The Google parent company’s shares, after falling earlier in the session because of concerns about sharply higher spending, were little changed in afternoon trading.
The Dow Jones Industrial Average rose 164.37 points, or 0.65 percent, to 25,403.74, the S&P 500 gained 10.64 points, or 0.39 percent, to 2,735.51 and the Nasdaq Composite added 51.44 points, or 0.7 percent, to 7,398.97.
Following a turbulent end to 2018, U.S. stocks have had a stellar run this year with the S&P 500 and the Dow each up about 9 percent and the Nasdaq rising 11 percent.
In addition to corporate earnings, Wall Street’s rally this year has been helped by a recent dovish stance from the Federal Reserve and hopes of a trade deal between the United States and China.
In his State of the Union speech, scheduled for 09:00 p.m. EST (0200 GMT Wednesday), Trump is expected to challenge Democrats to approve funding for his long-sought border wall.
The address could offer clues about the likelihood of compromise between Trump and his Democratic opponents, who now control the U.S. House of Representatives, said Pursche.
“We could move significantly higher if the geopolitical environment improves, and we could also decline if things break down,” he said. “There will lots of hints tonight about the U.S. political landscape.”
Among other stocks, Boeing Co shares rose 3.2 percent after the aerospace company said it made a significant investment in supersonic business jet developer Aerion.
Shares of Archer Daniels Midland Co slumped 6.7 percent after the grains trader’s fourth-quarter profit missed expectations because of the U.S.-China trade dispute.
Advancing issues outnumbered declining ones on the NYSE by a 1.77-to-1 ratio; on the Nasdaq, a 1.52-to-1 ratio favored advancers.
The S&P 500 had 17 new 52-week highs and no new lows; the Nasdaq Composite had 53 new highs and 12 new lows.
Reporting by April Joyner; Additional reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta and Steve Orlofsky