Friday 19 October 2018

US stocks climb again as Pepsi leads household goods rally

Pepsi staged its biggest rally in almost nine years after a solid second-quarter report.

The Dow Jones Industrial Average rose 143.07 points, or 0.6%, to 24919.66 (Martin Keene/PA)
The Dow Jones Industrial Average rose 143.07 points, or 0.6%, to 24919.66 (Martin Keene/PA)

By Marley Jay, Associated Press

US stocks shook off some midday doldrums and rose for the fourth day in a row on Tuesday as strong results from Pepsi helped household goods companies.

The market is at its highest level since early February.

Shares of most kinds of large companies finished higher, with food and consumer products makers, energy companies and utilities making some of the biggest gains.

Pepsi staged its biggest rally in almost nine years after a solid second-quarter report.

The S&P 500 is the highest it has been since February 1 and has climbed seven times in the last eight days even though the US and China are now in open conflict over trade.

Wall Street has focused instead on last week’s strong jobs report for June as well as company earnings reports.

Invesco Chief Global Market Strategist Kristina Hooper said investors are taking a risk by overlooking how damaging the trade war might get.

“This is all about pushing aside that which is messy and difficult to calculate,” she said. “It’s far easier to ignore it.”

The S&P 500 index added 9.67 points, or 0.3%, to 2793.84.

The Dow Jones Industrial Average rose 143.07 points, or 0.6%, to 24919.66.

The Nasdaq composite picked up three points to 7759.20.

The Russell 2000 index of smaller-company stocks lost 8.99 points, or 0.5%, to 1695.62 after big gains over the last five days.

Slightly more stocks rose than fell on the New York Stock Exchange.

Major US banks including JPMorgan Chase and Citigroup will announce their results on Friday morning, and most of the companies in the S&P 500 will report their results in the weeks after that.

Pepsi’s beverage sales are still struggling as the company tries to adjust to Americans’ changing drinking habits.

The maker of Gatorade, Mountain Dew and Tropicana said sales in North America fell, but its earnings were better than expected and analysts were pleased with its results in other markets.

The stock rose 4.8% to 112.89 dollars.

Investors are looking forward to another round of strong profit growth thanks to the growing US economy and the corporate tax cut that took effect at the end of 2017.

Ms Hooper, of Invesco, said that could help stocks over the next few weeks, but said the market might struggle after that.

She said the taxes the US placed on imported washing machines in January have clearly hurt sales, and there are signs the newer tariffs are affecting business spending.

US crude oil rose 0.4% to 74.11 dollars a barrel in New York.

Brent crude, used to price international oils, gained 1% to 78.86 dollars a barrel in London.

A shakeup at Lowe’s continued as the home improvement chain said its chief operating officer and several other executives are leaving because their jobs are being eliminated or assigned to other executives.

Marvin Ellison became Lowe’s CEO on July 2 and the company’s chief financial officer announced his retirement in June.

Lowe’s climbed 2.1% to 99.01 dollars.

J.M. Smucker said it will sell its US baking business, including Pillsbury.

Brynwood Partners will buy the division for 375 million dollars.

Smucker said the business had about 370 million dollars in sales over its last fiscal year and the sale will reduce its adjusted profit by 25-30 cents a share this year.

The stock declined 1.6% to 109.14 dollars.

In other commodities trading, wholesale gasoline added 0.5% to 2.16 dollars a gallon.

Heating oil rose 1.2% to 2.22 dollars a gallon.

Natural gas fell 1.4% to 2.79 dollars per 1,000 cubic feet.

Gold fell 0.3% to 1,255.40 dollars an ounce. Silver lost 0.3% to 16.09 dollars an ounce. Copper sank 0.4% to 2.84 dollars a pound.

The dollar rose to 111.28 yen from 110.82 yen. The euro fell to 1.1745 dollars from 1.1749 dollars.

France’s CAC 40 gained 0.7% and the German Dax added 0.5%.

Japan’s benchmark Nikkei 225 added 0.7% and South Korea’s Kospi gained 0.4%. In Hong Kong the Hang Seng dipped less than 0.1%.

Press Association

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