Wall Street stocks have posted their second straight daily gain, with robust corporate earnings and renewed optimism about the US economic recovery fuelling a risk-on rally.
All three major US stock indexes added to their previous session’s advance, placing all three within 1.0 per cent of their all-time closing highs.
Economically sensitive smallcaps, semiconductors and financials outperformed the broader market.
“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.”
A rebound in travel helped fuel United Airlines’ revenue beat, boosting its stock by 3.8 per cent.
The S&P 1500 Airlines index gained 3.3 per cent while the S&P 1500 Hotels, Restaurant and Leisure index advanced 2.9 per cent.
“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 US Treasury yields continued their bounce from five-month lows following a weak 20-year bond auction, which benefited rate-sensitive banks.
Wrangling in Washington DC over the passage of a bipartisan $US1.2 trillion ($A1.6 trillion) infrastructure package progressed as Senate Democrats moved toward a planned procedural vote despite Republican appeals for a delay.
The Dow Jones Industrial Average rose 286.01 points, or 0.83 per cent, to 34,798, the S&P 500 gained 35.63 points, or 0.82 per cent, to 4,358.69 and the Nasdaq Composite added 133.08 points, or 0.92 per cent, to 14,631.95.
Of the 11 major sectors in the S&P 500, energy stocks were the big winners, jumping 3.5 per cent with the help of 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 per cent have beaten consensus expectations.
Among the winners, Chipotle Mexican Grill jumped 11.5 per cent after the burrito chain beat earnings estimates and forecast strong current-quarter sales growth.
The stock boasted the S&P 500’s largest percentage gain.
Coca-Cola rose 1.3 per cent after raising its full-year forecast.
Interpuplic Group of Companies jumped 11.3 per cent after its upbeat earnings release.
Drug maker Johnson & Johnson forecast $US2.5 billion in sales from its one-shot COVID-19 vaccine this year and hiked its sales estimates.
It closed up a modest 0.6 per cent.
On the losing side, Netflix Inc late on Tuesday reported slowing subscriber growth, sending its shares down 3.3 per cent, the second-largest percentage loser in the S&P 500.
Harley-Davidson’s 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.
Its stock dropped 7.2 per cent.
Texas Instruments dipped more than 3.0 per cent in extended trading following results posted after the bell.
Advancing issues outnumbered declining ones on the NYSE by a 2.92-to-1 ratio; on Nasdaq, a 3.21-to-1 ratio favoured advancers.
The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 34 new lows.
Volume on US exchanges was 9.13 billion shares compared with the 10.17 billion average over the last 20 trading days.