Wall Street's three major indexes rose on Tuesday with the S&P 500 posting its strongest gain in three weeks as a string of healthy earnings boosted investor optimism and a rebound in the Turkish lira eased fears of a broader financial contagion. Gains were widespread, and the S&P 500 and the Dow Jones Industrial Average ended four-day losing streaks.
The Turkish lira regained some ground a day after it plunged to an all-time low. The rebound came as the country's central bank took steps to ease pressure on the currency. Shares of major US banks reversed course on easing Turkey fears, with the S&P financial sector closing the session up 0.9 percent.
Investors also focused on second-quarter results, as the reporting season draws closer to the finish line. So far, of 458 companies in the S&P 500 that have posted results, 79 percent have topped Wall Street estimates. "What we've seen thus far this year, is that rising earnings estimates have really been the driving factor behind (market) performance," said Bill Northey, senior vice president at US Bank Wealth Management in Helena, Montana. "There's this broad constructive fundamental backdrop, and some of the macro geopolitical factors are just receiving a little bit of relief today," Northey added.
Home Depot Inc beat consensus estimates, reporting stronger-than-expected sales despite signs of a slowdown in the US housing market. However shares of the home improvement chain - the first of the major brick-and-mortar retailers to post second-quarter earnings - slipped 0.5 percent. Shares of rival Lowe's Companies Inc rose 1.3 percent. Coach handbag maker Tapestry Inc reported a 31 percent jump in quarterly revenue. The company's shares jumped 12.0 percent.
Advance Auto Parts Inc reached a one-year high and ended the session up 7.8 percent after the company posted profit above estimates and announced a new share buy-back program. The Dow Jones Industrial Average rose 112.22 points, or 0.45 percent, to 25,299.92, the S&P 500 gained 18.03 points, or 0.64 percent, to 2,839.96 and the Nasdaq Composite added 51.19 points, or 0.65 percent, to 7,870.89. All 11 of the major sectors in the S&P 500 closed in positive territory.
Tesla Inc's shares dropped 2.5 percent after the company said a special committee formed to negotiate taking electric automaker private had yet to see a firm offer from CEO Elon Musk. Shares of Yum China Holdings Inc climbed 4.0 percent on news of a potential takeover by China Investment Corp and DEP Capital. Grocer Kroger Co announced it would partner with Alibaba Group Holding Ltd to sell its private label products on the e-commerce giant's Tmall platform in China. The stock closed up 2.4 percent. Advancing issues outnumbered declining ones on the NYSE by a 2.55-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favoured advancers. The S&P 500 posted 25 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 95 new highs and 83 new lows. Volume on US exchanges was 5.89 billion shares, compared to the 6.43 billion average over the last 20 trading days.
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