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Luxury retailers, technology companies push stocks higher

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Technology companies helped lead stocks broadly higher on Wall Street Tuesday as strong earnings reports from several companies put investors in a buying mood.

The rally, which briefly wavered around midday, extended the benchmark S&P 500 index’s winning streak to five days.

Technology stocks, which have lagged the market in recent months, accounted for much of the rally. Financial sector companies were among the biggest laggards.

Investors welcomed the latest batch of solid earnings reports from a range of U.S. companies, including luxury retailers Ralph Lauren and Estee Lauder and media companies Viacom and Walt Disney.

Halfway through the fourth-quarter earnings reporting season for U.S. companies, the results have come in broadly ahead of analysts’ forecasts. However that growth is expected to slow in the months ahead.

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“Big companies reported some really good results today,” said Lindsey Bell, an investment strategist at CFRA. “While the overall earnings season isn’t all that impressive versus the past four quarters, it’s still a pretty decent quarter.”

The S&P 500 index rose 12.83 points, or 0.5 percent, to 2,737.70. The Dow Jones Industrial Average gained 172.15 points, or 0.7 percent, to 25,411.52. The tech-heavy Nasdaq composite added 54.55 points, or 0.7 percent, to 7,402.08. The Russell 2000 index of smaller companies picked up 2.69 points, or 0.2 percent, to 1,520.23.

Major indexes in Europe finished higher.

Technology stocks helped power the market’s gains. Apple added 1.7 percent to $174.18, while Microsoft climbed 1.4 percent to $107.22.

Investors continued to focus on corporate earnings, seeking clues to how companies gauge their prospects for higher profits amid signs of weaker global growth and uncertainty over the U.S.-China trade dispute.

The market got encouraging news from upscale clothing company Ralph Lauren, whose most recent results topped Wall Street analysts’ forecasts as it benefited from growth in Asia and Europe. More importantly, it raised its forecast despite some fears about an economic slowdown hitting Europe and Asia. The stock jumped 8.4 percent to $124.16.

Estee Lauder, which also reported better results and said it expects growth in Asia, vaulted 11.6 percent to $152.02.

Leggett & Platt was among the retailers whose shares surged Tuesday on strong earnings. The home furnishings company climbed 9.8 percent to $44.88.

Viacom, an entertainment company that owns Comedy Central and Paramount Pictures, rose 3 percent to $30.33 after reporting earnings that also beat analysts’ estimates. Walt Disney’s latest quarterly report card also blew past expectations. The media giant, which issued its results after the market close, rose 0.8 percent to $112.66 in regular trading.

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Not all companies boasted solid results. Higher spending on marketing and pressure from tariffs knocked profits down 68 percent at Church & Dwight, a major maker of household products. The results fell short of Wall Street’s forecasts, sending shares in the Arm & Hammer brand owner down 7.5 percent to $60.46.

More than 68 percent of companies reporting earnings in the S&P 500 beat analyst forecasts during the most recent quarter. Those results, in part, helped drive the market’s best January in 32 years.

Analysts are warning that earnings growth could slow down substantially in the coming months. Companies have so far reported overall earnings growth of 16.2 percent in the latest quarter, according to data compiled by Factset. However, analysts surveyed by FactSet expect earnings to shrink 1.3 percent in the first quarter and then to grow just 1.3 percent and 2.6 percent in the second and third quarters, respectively.

U.S. crude oil fell 1.6 percent to settle at $53.66 per barrel in New York. Brent crude, used to price international oils, slid 0.8 percent to close at $61.98 per barrel in London.

Bond prices rose. The yield on the 10-year Treasury fell to 2.70 percent from 2.72 percent late Monday.

The dollar strengthened to 109.97 yen from 109.90 yen on Monday. The euro weakened versus the dollar to $1.1410 from $1.1432.

Gold was little changed at $1,319.20 an ounce. Silver lost 0.3 percent to $15.84 an ounce. Copper gained 0.8 percent to $2.82 a pound.

In other energy futures trading, wholesale gasoline fell 0.4 percent to $1.43 a gallon. Heating oil slid 0.5 percent to $1.90 a gallon. Natural gas rose 0.1 percent to $2.66 per 1,000 cubic feet.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

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