By Yasin Ebrahim
Investing.com –The Dow racked up gains on Tuesday as better-than-expected earnings lifted investor sentiment.
The Dow Jones Industrial Average rose 1.14%, or 303 points. The S&P 500 gained 0.60%, while the Nasdaq Composite slipped 0.26%.
Coca-Cola (NYSE:KO) reported second-quarter results that beat on the bottom line, but missed consensus estimates on the top-line, which the beverage and snacks maker blamed on the impact from the pandemic.
International Business Machines (NYSE:IBM), meanwhile, pared the bulk of its gains despite delivering second-quarter results above Wall Street expectations, underpinned by a contribution from Red Hat.
"(W)e think 2Q marks the trough for IBM and the renewed focus on LT growth (vs. NT profit) positions them well to emerge stronger post-COVID," Credit Suisse (SIX:CSGN) said in a note as it upgraded its price target on the stock to $155 from $150.
Gains in the broader market were also supported by surging energy stocks. Recent progress on potential Covid-19 vaccines and a historic €750 billion EU stimulus deal has cooled worries about oil demand weakness, sending oil prices to more than one-month highs.
Occidental Petroleum (NYSE:OXY), Apache (NYSE:APA) and Devon Energy (NYSE:DVN) soared, with latter rising more than 12% after Simmons Energy upgraded the stock to an overweight rating.
Financials were also among the biggest gainers, with banks up sharply following their mostly bullish earnings last week.
Wells Fargo (NYSE:WFC) jumped 5.7% after announcing Mike Santomassimo would become replace retiring John Shrewsberry as chief financial officer.
The rally in tech cooled, meanwhile, as the so-called Fab 5, with the exception Alphabet (NASDAQ:GOOGL), faltered. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon.com (NASDAQ:AMZN) struggled to turn positive.
On the economic front, investors cheered signs that the path of the recovery remained somewhat intact despite an ongoing surge in cases.
The Chicago Fed Manufacturing Index rose to a reading of 4.11 from 2.61, topping economists' forecast for a treading of 4.00. A reading below zero suggests below-trend growth in the economy and a sign of slowing inflation.
Coronavirus cases in the U.S. topped 3.8 million, with over 140,000 dead, according to Johns Hopkins.