Stocks closed higher on Tuesday as the latest corporate earnings season got under way while worries of an ongoing trade war declined.
The Dow Jones Industrial Average rose 143.07 points to 24,919.66 as DowDuPont and Procter & Gamble outperformed. The 30-stock index also posted its fourth straight day of gains.
The S&P 500 gained 0.4 percent to 2,793.84 — its highest since Feb. 1 — with telecommunications and staples both rising at least 1 percent. The Nasdaq Composite closed just above breakeven at 7,759.20. The Russell 2000, which is made up of small-cap stocks, reached an all-time high before closing 0.5 percent lower at 1,695.62.
Earnings for the first calendar quarter rose 24 percent on a year-over-year basis. Wall Street is expecting similar results for calendar second quarter. Analysts polled by FactSet expect S&P 500 second-quarter earnings to have grown by 20 percent.
More than 20 companies in the S&P 500 have already released their quarterly results, including PepsiCo. The soft drink and snacks maker posted better-than-expected earnings, sending its shares higher by 4.8 percent, its biggest one-day gain since August 2009. PepsiCo also said it expects “substantially higher” earnings growth for fiscal fourth quarter.
Pepsi is not the only company to have beaten expectations thus far. Nick Raich, CEO of The Earnings Scout, said in a note Tuesday that 86 percent of the companies that have already reported exceeded their quarterly earnings expectations, posting 24.08 percent year-over-year growth.
“Those are phenomenal numbers, but as we said they do not matter for current stock prices,” Raich said. “This is why we are looking at the changes in earnings estimates after companies report and comparing them to prior periods to determine if the underlying trend in profit expectations can stay on an improving path.”