Strong earnings boost U.S. stocks; oil, copper prices jump
A set of strong U.S. earnings reports sent the S&P 500 stock index to a record high on Tuesday, while oil prices rallied 3 percent on Saudi Arabia`s pledge to cut exports in August and copper hit a two-year high.
The dollar edged up after hitting its lowest level since June 2016 as the Federal Reserve began a two-day policy meeting.
The Fed is expected to discuss its monetary policy stance and the timing of a long-awaited balance sheet reduction, a plan seen as likely to be detailed in September. No change to U.S. interest rates was expected.
There is a growing sense that the Fed will want to tread carefully amid signs of subdued U.S. inflation, and markets were reflecting that. They were also influenced by strong German economic data and Greece`s first return to capital markets since 2014.
Investors also are watching for the U.S. Senate to vote on a repeal of the 2010 Affordable Care Act, which President Donald Trump and Republicans have vowed to undo.
There has been concern that the failure to pass healthcare legislation reflects discord that will make budget negotiations acrimonious, raising the risks that debt payments due in October may be delayed as the United States bumps up against the debt ceiling.
"Right now, it`s kind of risk on. There`s been a certain amount of pullback based on concerns about politics and earnings growth. With politics, arguably the worst has happened with healthcare. There`s only the possibility of a pleasant surprise now," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
"We`ve seen earnings come, in aggregate, well above what was expected. So basically the corporate fundamentals are ratifying what the market has been saying all along," McMillan said.
In the U.S. stock market, volatility was muted with the VIX index <.vix>, Wall Street`s so-called fear gauge, at a 23-year low.
Upbeat results from Caterpillar Inc
Shares in Google parent Alphabet Inc
The Dow Jones Industrial Average <.dji> was up 116.72 points, or 0.54 percent, to 21,629.89, the S&P 500 <.spx> had gained 8.8 points, or 0.36 percent, to 2,478.71 and the Nasdaq Composite <.ixic> had added 6.89 points, or 0.11 percent, to 6,417.69.
MSCI`s index of stock markets across the world <.miwd00000pus> was up 0.2 percent, while European shares <.fteu3> rose 0.5 percent.
The dollar index <.dxy>, which measures the greenback against a basket of currencies, was last up 0.1 percent. It earlier hit its lowest level since June 2016 at 93.638.
It has fallen nearly 4 percent over the last month and more than 8 percent this year, and was last down 0.2 percent on the day at 93.811.
U.S. Treasury yields rose as gains in stocks, as well as expectations that legislators in Washington may pass a healthcare overhaul, helped reduce demand for safe-haven U.S. bonds.
Benchmark 10-year notes
The U.S. Senate voted to begin formal debate of healthcare legislation that would repeal major elements of Obamacare and possibly replace it with a less costly program.
In commodities, U.S. crude
Copper prices hit their highest in more than two years, boosted by signs of demand from China and a weak dollar. Copper
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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