Oct 24, 2017

Dow hits record, boosted by earnings-driven gains from Caterpillar, 3M

U.S. stocks rose on Tuesday, with the Dow hitting its latest in a series of record as earnings continue to come in largely ahead of expectations.


Both Caterpillar and 3M boosted the blue-chip average's advance, while broader gains were limited by declines in health care shares.

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, +0.80%  rose 177 points, or 0.8%, to 23,455, hitting an intraday record in early trading. The S&P 500 SPX, +0.17% was up 5 points, or 0.2%, to 2,570. The Nasdaq Composite COMP, +0.26%  rose 5 points, or 0.1%, to 6,592. Both the S&P and the Nasdaq remain within 1 percentage point of their own records.

Industrial shares were the biggest gainers of the day, with the sector up 0.8% on Caterpillar's advance. Health care stocks dropped 0.9% in the wake of results from Biogen Inc. and Eli Lilly.

COMP, +0.26% Which stocks look like key movers?

Heavy-machinery manufacturer Caterpillar Inc. CAT, +4.61%  jumped 5.8% in its biggest one-day percentage gain since July after its earnings beat forecasts. Fellow Dow component3M Co. MMM, +7.01% gained more than 6% after its own results, putting it on track for its biggest one-day pop since July 2009. Both stocks were among the biggest gainers on the Dow and the S&P.

Shares in Whirlpool WHR, -10.19%  fell 10% a day after the appliance manufacturer posted weaker-than-anticipated results and lowered its outlook, and Sears Holdings Corp. SHLD, -2.21%  reportedly plans to stop selling Whirlpool appliances in its stores. Whirlpool was the S&P's biggest premarket loser. Sears shares lost 3.1%.

McDonald's MCD, +1.54% rose 1.5% after reporting third-quarter results that met expectations. Global same-store sales rose 6% in the quarter, above forecasts.

Lockheed Martin Corp. LMT, -2.57%  fell 2.5% after its third-quarter profit came in below analyst forecasts.

General Motors Co. GM, +2.06%  rose 2.5% after it posted earnings and revenue that topped forecasts.

Drug giant Eli Lilly & Co. LLY, -2.60%  fell 2.2% after its results while Biogen Inc. BIIB, -4.78% sank 7.2% despite results that topped forecasts.

Facebook Inc. FB, +0.95%  edged 0.9% higher after the social network late Monday denied that it's planning to charge publications to post in its main product.

What could help drive markets?

No Federal Reserve officials are scheduled to make speeches on Tuesday, but traders may be bracing for Thursday's European Central Bank gathering and Friday's release on third-quarter gross domestic product. There are also expectations that President Trump will announce a new Federal Reserve boss before he starts a trip to Asia on Nov. 3.

What are strategists saying?

"For the most part, earnings across sectors are coming in strong, and Caterpillar is significant today. Not only did they blow their numbers out of the water, but they export so much, suggesting that the whole concept of the global economy becoming synchronized and moving higher is in play," said John Brady, managing director at R.J. O'Brien & Associates, a futures brokerage and clearing company.

"I'm not concerned about valuations yet, though it is hard to find cheap stocks. But there is just no compelling investment alternative to equities right now."

What are other assets doing?

Oil futures CLZ7, +0.02%  were advancing, while gold futures GCZ7, -0.32%  and the ICE U.S. Dollar Index DXY, +0.09% inched lower. European stocks SXXP, -0.29% were a mixed bag, as were Asian markets.

Market Watch

by VICTOR REKLAITIS and Ryan Vlastelica