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Caterpillar, 3M Earnings Boost Dow to Record High
24-Oct-17 16:30 ET
Dow +167.80 at 23441.76, Nasdaq +11.60 at 6598.42, S&P +4.15 at 2569.13

https://www.briefing.com/investor/markets/stock-market-update/2017/10/24/caterpillar-3m-earnings-boost-dow-to-record-high.htm

[BRIEFING.COM] The stock market crept higher on Tuesday, notching its first win of the week, following a largely solid batch of third quarter earnings. Caterpillar (CAT 138.24, +6.56) and 3M (MMM 234.65, +13.10) pushed the Dow (+0.7%) to a new record high after reporting particularly strong Q3 results, while the S&P 500 (+0.2%) and the Nasdaq (+0.2%) finished with more modest gains.

Caterpillar and 3M both reported stronger-than-expected earnings and revenues on Tuesday morning and raised their guidance for fiscal year 2017. The two industrial giants climbed 5.0% and 5.9%, respectively, helping the S&P 500's industrial sector (+0.5%) settle near the top of the sector standings.

However, fellow industrial giant--and Dow component--United Technologies (UTX 119.74, -1.15) tumbled 1.0%, despite beating third quarter profit estimates.

The lightly-weighted materials sector (+0.6%) finished roughly in line with the industrial space, but the heavily-weighted financial sector (+0.7%) did even better, making the most of a curve-steepening trade in the bond market. Treasuries finished mixed, with the yield on the benchmark 10-yr Treasury note climbing three basis points to 2.41%, while the 2-yr yield slipped one basis point to 1.57%.

McDonald's (MCD 163.88, +0.54) advanced 0.3% on Tuesday, even though its third quarter earnings fell short of expectations. The opposite was true for health care giants Eli Lilly (LLY 85.17, -2.01) and Biogen (BIIB 315.73, -12.82), which tumbled 2.3% and 3.9%, respectively, despite reporting stronger-than-expected earnings and revenues.

The health care sector (-0.7%) finished at the bottom of the sector standings, alongside other countercyclical groups like consumer staples (-0.3%) and telecom services (-0.6%). In general, cyclical sectors outperformed their countercyclical peers on Tuesday, signaling an increased appetite for risk among investors.

In Washington, Senator Jeff Flake (R-AZ) announced that he will not run for re-election in 2018. Mr. Flake has been a critic of President Trump and will be a Senator to watch as he now seemingly has fewer political consequences if he decides to vote against Republican legislation. The GOP holds just a two-seat majority in the Senate.

Investors did not receive any economic data on Tuesday.

However, on Wednesday, market participants will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, September Durable Orders (Briefing.com consensus 1.3%) at 8:30 ET, the August FHFA Housing Price Index (Briefing.com consensus 0.4%) at 9:00 ET, and September New Home Sales (Briefing.com consensus 555K) at 10:00 ET.

Nasdaq Composite +22.6% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +14.8% YTD
Russell 2000 +10.6% YTD