US stocks climb in afternoon trading as earnings reports roll in; Chipotle jumps 12 percent
NEW YORK (AP) -- Solid earnings for a range of big companies helped nudge the stock market higher on Tuesday. The restaurant chain Chipotle and the cable giant Comcast surged after reporting better results than Wall Street expected.
KEEPING SCORE: The Standard & Poor's 500 index added eight points, or 0.4 percent, to 1,981 as of 2:45 p.m. Eastern time.
The Dow Jones industrial average rose 51 points, or 0.3 percent, to 17,103. The Nasdaq composite advanced 23 points, or 0.5 percent, to 4,458.
COMMENT: "The news today is pretty good," said JJ Kinahan, chief strategist at TD Ameritrade. Kinahan pointed to a report out Tuesday that showed little sign of inflation and an overall stronger outlook for earnings. During conference calls to discuss quarterly results, more CEOs are taking an optimistic tone, he said, instead of warning about possible dangers.
"In the past, they all spent their time tempering expectations," Kinahan said. "This earnings season we're not seeing that at all. I think people are taking comfort in it."
MORE BURRITOS: After the market closed Monday, Chipotle Mexican Grill reported that stronger sales drove its quarterly profit up 26 percent. The restaurant chain's results beat analysts' expectations, even as it raised prices on a range of menu items. Chipotle surged $73.32, or 12 percent, to $662.25, the biggest gain in the S&P 500 index.
PLUGGED IN: Comcast, the country's largest cable company, reported quarterly profits that topped Wall Street's targets, as more people signed up for Internet service. Comcast gained 79 cents, or 1.5 percent, to $54.60.
COKE: Weak sales of Diet Coke and fruit juice weighed down Coca-Cola's second-quarter results, leading the company to post weaker revenue than Wall Street expected. Overall profit fell slightly. Coca-Cola's stock sank $1.31, or 3 percent, to $41.09.
PRICE WATCH: U.S. consumer prices inched up 0.3 percent in June, with most of the increase coming from higher largest jump in gasoline prices, according to the Labor Department. Core prices, which exclude volatile food and energy, were up just 0.1 percent. Over the past year, core prices are up 1.9 percent, close to the Federal Reserve's target rate for inflation.
BIG WEEK: Nearly a third of the big companies in the S&P 500 index will announce their quarterly results this week, including AT&T and Boeing on Wednesday, followed by Visa and Amazon on Thursday. Apple and Microsoft report after the closing bell on Tuesday.
CAUTIONARY NOTE: Even though companies continue to post higher profits, the market still looks expensive compared to its historical average. The S&P 500 currently trades for 17.4 times earnings over the previous 12 months. The long-run average is closer to 15.
"In the short term, I expect the market to continue higher," said Brad McMillan, the chief investment officer at Commonwealth Financial. "But I am concerned about the market's valuation."
EUROPE: Major stock markets in Europe were higher Tuesday. Germany's DAX rose 1.3 percent while France's CAC-40 gained 1.5 percent. Britain's FTSE 100 advanced 1 percent.
EURO LOW: The euro hit its lowest level against the dollar this year amid concerns over a freeze in relations between the European Union and Russia. EU foreign ministers agreed to extend the current list of sanctions on Russians, a result of the Malysian Airlines passenger flight shot down over Ukraine last week.
The European currency fell a further 0.4 percent Tuesday to $1.3464, its lowest level since last November.
BONDS AND OIL: U.S. government bond prices rose, pushing the yield on the 10-year Treasury note to 2.46 percent. Benchmark U.S. crude oil fell 54 cents to $102.33 a barrel.