U.S. stocks rose closer to record levels Tuesday as investors cheered on a series of largely optimistic corporate earnings reports while mulling the implications of a partial US-China trade announced last Friday.
How are the most important benchmarks going?
Dow Jones Industrial Average
DJIA, + 1.02%
was up 256.83, or 1.0%, to 27,044, while the S&P 500 index
SPX, + 1
gained 32 points, or 1.0%, to 2,998. The Nasdaq Composite Index
COMP, + 1.33%
increased 96 points, or 1.2%, to 8,146.
The S&P 500 was about 1% below its record close of 3,025.86 set on July 26 , while the Dow Jones Industrial Average was around 1.2% below its record finish of 27,359.16 set on July 15, and the Nasdaq Composite was around 2.3% away from the record close of 8,330.21 scored July 26.
The Dow edge 29.23 points lower Monday to end at 26,787.36, a loss of 0.1%. The S&P 500 closed down 4.12 points, down 0.1%, at 2,966.15, while the Nasdaq Composite lost 8.39 points, or 0.1%, to finish at 8,048.65.
Read: 5 prominent US companies are most wrong for the revenue recession
What is driving the market?
The United States' third quarter income reporting season started Tuesday with results from the nation's largest banks, reflecting a relatively healthy US consumer and a more cautious business community.
Shares of JPMorgan Chase & C o.
JPM, + 3.96%
rose after reporting revenue and revenue that rose more than expected on the back of its Consumer Banking division, while Wells Fargo & Co.
WFC, + 3.23%
was also up after reporting a surprising increase in revenue, although third-quarter profits fell more than expected.
C, + 1.95%
shares gained after reporting quarterly sales and profits that beat expectations, while Goldman Sachs Group Inc.
GS, + 0.13%
GS, + 0.13%
reported a sharp decline in earnings of 26% year-on-year, reflecting weaknesses in the merger and acquisition market and debt and stockbroking.
"It's a better time to be a traditional, consumer-facing bank than an institutional or commercial bank," Stephen Biggar, director of financial institution research at Argus Research told MarketWatch. "Underwriting and financial advice were weak places [in the third quarter] but the consumer is broadly equal, "he added.
UnitedHealth Group Inc .
UNH, + 7.63%
provided Tuesday's most impressive revenue release, after earnings and revenues exceeded expectations and after the health service company raised its outlook for the full year.
However, revenue from the S&P 500 indexes is expected to fall 4.6% in the third quarter, according to FactSet. This would be the first time revenue revenue has fallen in three straight quarters since the fourth quarter of 2015 through the second quarter of 2016, said FactSet analyst John Butters.
Earnings forecasts focused on headwinds from the slow decline in economic growth and uncertainty in international trade policy, with profit margins seen under pressure. However, it is again seen that buy back companies support earnings per share.
"Corporate America is unlikely to deliver much, if any, third quarter revenue growth," said LPL Financial's chief investment strategist, John Lynch. “However, we think better days are ahead. We expect trade advances to keep US economic growth at or above the current economic expansion trend. It is unlikely that US-China trade conflicts will be resolved anytime soon, but we believe that small steps ahead can boost business confidence and raise capital investment and boost company profits. ”
Check out: Banks look to turn the earnings recession in reverse, but are not expected to succeed
Enthusiasm over a US-China trade agreement increased stocks at the end of last week, but analysts said that shortages on details of planned tariff increases and other elements dampened enthusiasm,
"The last twist in the US-China trade conflict is another reminder for investors not to get caught up in the hype," said Han Tan, market analyst at FXTM, in a note. "Trying to bridge the conflicting interests between the world's two largest economies is a gigantic task; a company that has already proven to be long-standing and complicated."
In a speech with reporters in London, St. Louis Fed President James Bullard said investors may be overly optimistic about how long it will take to get to trading deals, and he also emphasized that consumption data, while strong, was "backwards" and said that was why has "emphasized these disadvantages and also emphasized preventative types of measures to stay out of recession." Last month, Bullard dissented from the Federal Reserve's decision to cut interest rates by a quarter-point, rather than reduce its half point.  In its World Economic Outlook, published Tuesday, the IMF sees global economic growth at 3% this year, the slowest pace since the 2008 financial crisis.
Which stocks are in focus?
Dow Constituent Johnson & Johnson
JNJ, + 2.02%
reported revenue and revenue that exceeded Wall Street estimates, while the company lifted its full-year guidance.
Shares of BlackRock Inc.
BLK, + 2.97%
were on the rise after reporting a lower profit than expected fall in earnings.
How do other markets trade?
Return on the 10-year US Treasury
TMUBMUSD10Y, + 1.92%
rose to 1.754% from 1.748% late Friday. Bond markets were closed Monday for the Columbus Day holiday.
In commodity markets, West Texas, intermediate crude oil
fell around 6 cents to $ 53.53 on New York Mercantile Exchange and gold futures
ticked down $ 13 to $ 1484.70 on Comex.
European stocks on Tuesday raised optimism over the possibility of a deal on an agreed Brexit package as well as better than forecast US revenues. Stoxx Europe 600
SXXP, + 1.11%
ended 1.1% higher at 394.02, the best level since May 22, 2018.
In Asia overnight, shares traded with Japan's Nikkei
NIK, + 1.87%
increasing 1.9%, China CSI 300
falling 0.4% and Hong Kong's Hang Seng Index
falling 0.1%. In Europe, stocks were generally higher, such as the Stoxx Europe 600
SXXP, + 1.11%
la to 1.2%.