U.S. Stock Indexes Hit Record Highs on Strong Earnings

U.S. stock indexes firmed before the opening on Tuesday and never looked back the rest of the session, closing higher after several major companies reported better-than-expected quarterly results.

In the cash market, the benchmark S&P 500 Index settled at 2477.13, up 7.22 or +0.29%. The blue chip Dow Jones Industrial Average closed at 21613.43, up 100.26 or +0.47% and the technology-based NASDAQ Composite ended the session at 6414.07, up 3.26 or +0.05%.

The Dow Jones Industrial Average posted the highest gain, led by strong performances in Caterpillar and McDonald’s. It was followed by the S&P 500 Index, which hit intraday and closing records. The energy sector rose more than 1 percent on the back of a sharp rise in crude oil. It was followed by strong performances in the financials and energy sectors.

The NASDAQ Composite also hit an intraday and closing record, but gains were limited by a weak performance in Alphabet – Google’s parent stock.

Economic News

According to the S&P CoreLogic Case-Shiller home price index, major metro area home prices rose 5.7 percent in May. However, this was slightly below the forecast and previous read.

The Home Price Index (HPI) rose 0.4%, lower than the 0.5% estimate. The previous month was revised down to a 0.6% gain.

The Richmond Manufacturing Index was a solid 14, up from 7. It also beat the estimate.

Conference Board Consumer Confidence came in well above expectations at 121.1. Traders were looking for 116.5. The previous month was revised lower to 117.3.

Crude Oil

Crude oil futures extended yesterday’s gains on Tuesday to finish at a seven-week high. Early in the session, the market was supported by bullish news from the oil ministers’ meeting in St. Petersburg, Russia on Monday.

At the meeting of OPEC and non-OPEC leaders, Saudi Energy Minister Khalid al-Falih said his country would limit its crude exports to 6.6 million barrels per day in August, almost 1 million bpd below levels a year ago.

Additionally, Nigeria voluntarily agreed to join the deal by capping or cutting its output from 1.8 million bpd, once it stabilizes at that level.

Late in the session, prices were boosted by an American Petroleum Institute report that showed a sharp drop in crude oil stocks. Gasoline inventories rose, but distillate stocks decreased.

Gold

Comex gold prices fell on Tuesday after reaching a one-month high the previous session. The precious metal was pressured by increased demand for higher risk assets and position-squaring ahead of Wednesday’s U.S. Federal Reserve interest rate decision and monetary policy statement. The Fed is not expected to raise rates, but investors will be looking for hints on the timing and extent of future moves.