S&P 500 rises on upbeat corporate earnings; Travelers weighs on Dow

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© Reuters. Traders work on the floor at the NYSE in New York© Reuters. Traders work on the floor at the NYSE in New York

By Shreyashi Sanyal

(Reuters) – The S&P 500 rose on Tuesday, bolstered by gains in Biogen (NASDAQ:) and upbeat earnings reports that eased concerns over the fallout from the U.S.-China trade war, but the Dow Jones index was pressured by a drop in McDonald’s and Travelers.

The benchmark S&P 500 index was within striking distance of a record high hit in July after trading above 3,000 points in the previous session on signs of progress toward resolving the spat between the world’s two biggest economies.

Biogen’s shares surged 36% after the drugmaker announced a surprise plan to file for U.S. regulatory approval for its Alzheimer’s treatment.

The wider healthcare index () clocked the biggest increase among the major S&P 500 sectors.

Strong corporate earnings since last week have provided some respite to equity markets, which were rattled over the past few months by geopolitical worries and a slowing global economy.

“It’s been a pretty good season so far, but I always caution people the early announcers have a tendency to be better than the later ones, so those numbers come down throughout the season,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:) in Austin, Texas.

Of the 98 S&P 500 companies that have reported results so far, over 80% of them topped Street estimates. Still, analysts project the first earnings contraction since 2016 against the backdrop of a slowing domestic economy and the prolonged trade war.

Procter & Gamble Co (N:) gained 3.1%, lifting the consumer staples sector () by 0.5%, after raising full-year forecasts and beating Wall Street estimates.

Harley-Davidson Inc (N:) jumped 5% as it beat quarterly profit expectations, while United Technologies Corp (N:) gained 0.7% on a forecast raise.

However, the Dow struggled for direction after a 2.8% decline in the shares of McDonald’s Corp (N:) and a 7.3% drop in Travelers Cos Inc (N:) on poor results.

The threat of tariffs on toys imported from China hit toymaker Hasbro Inc’s (O:) quarterly profit as shipping and warehousing costs soared. Its shares fell 14.6% and were the biggest decliners among S&P 500 companies.

At 10:08 a.m. ET the Dow Jones Industrial Average () was up 11.69 points, or 0.04%, at 26,839.33, while the S&P 500 () was up 5.98 points, or 0.20%, at 3,012.70. The Nasdaq Composite () was up 18.48 points, or 0.23%, at 8,181.47.

Among other stocks, Bristol-Myers Squibb Co (N:) was trading 6.8% higher on positive data from a late-stage lung cancer trial. Shares of rival Merck & Co Inc (N:) slipped 4.7%.

Advancing issues outnumbered decliners by a 1.18-to-1 ratio on the NYSE and for a 1.04-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and two new lows, while the Nasdaq recorded 41 new highs and 35 new lows.

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