By Sruthi Shankar
With U.S Treasury yields easing slightly from the peaks hit on Monday, the results from industrial heavyweights helped reinforce optimism about the pace of U.S. economic growth and a first-quarter earnings season now in full swing.
Shares of Caterpillar jumped 3.6 percent in premarket trading, while Pratt & Whitney aircraft engines-maker United Tech rose 2 percent after the companies topped quarterly profit estimates and raised their full-year earnings forecasts.
The results also run contrary to a 0.4 percent fall in the S&P industrials index this year due to fears of a tit-for-tat trade war with China.
"Two big-cap companies, industrials and global in nature, beating estimates, and the takeaway being that fundamentals remain strong for corporate America," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
About 18 percent of the S&P 500 companies had reported results as of Monday, with 78 percent topping profit estimates, according to Thomson Reuters I/B/E/S.
That has pushed up analysts' estimates for earnings growth in the quarter to nearly 20 percent, from 18.6 percent just over than a week back, making it the strongest in seven years.
One dampener was Google-parent Alphabet, which dipped 0.2 percent as investors focused on rising costs rather than the profit beat.
"On balance, the numbers were pretty good and some of the issues related to spending are idiosyncratic to the business. I don't think its going to indict the entire sector," said Luschini.
At 8:47 a.m. ET, Dow e-minis were up 135 points, or 0.55 percent. S&P 500 e-minis were up 13.5 points, or 0.51 percent and Nasdaq 100 e-minis were up 26.75 points, or 0.4 percent.
Coca-Cola gained 0.7 percent after its revenue beat estimates, helped by higher demand for Coke Zero Sugar and new flavours of Diet Coke. Verizon jumped 3.4 percent after its profit beat expectations.
Still, not all results from industrial companies or Dow components were strong. 3M fell 4.5 percent after it managed to only match profit estimates.
A drop in sales for the screen glass unit of telecoms parts producer Corning Inc may also add to growing market nerves about demand for high-end smartphones.
Ten-year bond yields were at 2.9864 percent, still at four-year highs, but lower than the peak of 2.9980 percent hit on Monday due to a growing supply of government debt and accelerating inflation as commodity prices gained.
Oil rose above $75 a barrel to its highest since November 2014, supported by OPEC-led production cuts, strong demand and the prospect of renewed U.S. sanctions on Iran.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)