NEW YORK, July 21 (Reuters) - Wall Street clinched its second straight advance on Wednesday, as robust corporate earnings and renewed optimism about the U.S. economic recovery fueled investor risk appetite.
All three major U.S. stock indexes extended the previous session's gains, placing all three within 1% of their all-time closing highs.
"It’s a seesaw going on between great earnings and a recovering market and concerns over whether the economy is going to slow down because of the (COVID-19) Delta variant," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "But we’re seeing strong earnings with generally positive guidance, and the feeling that (the Delta variant) can be managed."
"Earlier in the week those stocks suffered because of renewed fears that travel will slow down and all related industries will suffer, but those fears have gone away," Tuz added. "Demand is continuing as expected, I don’t think the Delta fear is causing people to change their plans."
Benchmark U.S. Treasury yields continued their bounce from five-month lows following a weak 20-year bond auction, which benefited rate-sensitive banks.
"People are comforted by 10-year bond rates, it’s a sign of the recovery play," Tuz said. "There’s flight away from safety today."
Wrangling in Washington over the passage of a bipartisan $1.2 trillion infrastructure package progressed as Senate Democrats moved toward a planned procedural vote despite Republican appeals for a delay. read more
Unofficially, the Dow Jones Industrial Average (.DJI) rose 285.75 points, or 0.83%, to 34,797.74, the S&P 500 (.SPX) gained 35.59 points, or 0.82%, to 4,358.65 and the Nasdaq Composite (.IXIC) added 133.08 points, or 0.92%, to 14,631.95.
Of the 11 major sectors in the S&P 500, energy stocks (.SPNY) were the big winners, helped by surging crude prices .
Second-quarter reporting season has shifted into overdrive, with 73 of the companies in the S&P 500 having posted results. Of those, 88% have beaten consensus expectations.
Current estimates show aggregate year-on-year S&P 500 earnings growth of 75% for the April to June period, a significant jump from the 54% growth seen at the beginning of the quarter.
Harley-Davidson's (HOG.N) second-quarter earnings release showed its turnaround plan appeared to be making progress, but the company lowered its operating income guidance due to tariffs from Europe, its second-biggest market. read more
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