U.S. Stocks Rise as Investors Focus on Earnings

U.S. equity indexes rallied on Tuesday as investors returned their focus to corporate earnings while setting aside worries about Trump for at least a day. The benchmark cash S&P 500 Index futures contract rose nearly 0.60% with the materials sectors providing the most support. The blue chip Dow Jones Industrial Average rose about 120 points, led by IBM. The tech-based NASDAQ Composite also rose about 0.60%, hitting a new all-time high in the process.

The price action suggests investors are optimistic about this season’s earning season and that they are willing to wait for Trump to reveal his economic plans regarding fiscal spending, improving infrastructure, cutting taxes and reducing regulations.

Some traders, however, feel that investors are still leery about Trump’s policies which may be one of the reasons for the lack of fresh first quarter estimates.

Some investors also feel that it is going to be difficult for Congress to hammer out the details of a massive stimulus package without encountering some problems. Furthermore, the markets still have to deal with the Fed and the possibility of three rate hikes in 2017.

Crude Oil

U.S. March WTI and international crude oil futures traded mixed early in the session before moving decisively higher at the mid-session. The market was supported by fresh news indicating the global market is tightening as lower production by OPEC and other exporters drain stocks.

Traders were primarily reacting to comments from the ministers of several OPEC members who said that about 1.5 million barrels per day of the 1.8 million pledged have already been removed from the market.

However, gains are still be capped by worries that any reductions in output will be met with increased production from the U.S.

Later today, the American Petroleum Institute (API) is scheduled to release fresh supply data. On Wednesday, the U.S. Energy Information Administration is expected to report that U.S. crude stocks rose by 2.7 million barrels.

In other oil related news, President Trump signed an executive order to advance construction of two oil pipelines that were previously stopped by former President Obama.

Economic News

In other news, the HIS Markit Manufacturing PMI for January rose to 55.1, from 54.3 in December. Traders said a surge in new orders was behind the rise. Existing home sales fell 2.8 percent in December.