Specialist David Haubner, left, and trader Thomas McCauley work on the floor of the New York Stock Exchange, Tuesday, Feb. 5, 2019. (Photo: AP)
Stocks extended early gains on Wall Street Tuesday following strong earnings reports from a range of US companies, including several luxury retailers.
Ralph Lauren and Estee Lauder surged after reporting earnings that came in well ahead of what analysts were expecting. Both said they were seeing better sales in Asia. That was an encouraging sign for investors, who have been worrying in recent weeks that growth in China’s economy was cooling off.
Technology stocks, former investor favorites which have lagged the market in recent months, picked up some gains. Apple rose 1.7 percent and Microsoft added 1.1 percent.
Two-thirds of the way through the fourth-quarter earnings reporting season for US companies, the results have come in broadly ahead of analysts’ forecasts. However that growth is expected to slow in the months ahead.
KEEPING SCORE: The S&P 500 index rose 3 points, or 0.1 percent, to 2,728 as of noon Eastern time. The Dow Jones Industrial Average rose 105 points, or 0.4 percent, to 25,348. The Nasdaq composite rose 27 points, or 0.4 percent, to 7,374.
INVESTORS BEWARE: More than 68 percent of companies reporting earnings in the S&P 500 beat analyst forecasts during the most recent quarter. Those results, in part, helped drive the market’s best January in 32 years.
Analysts are warning that earnings growth could slow down substantially in the coming months. Companies have so far reported overall earnings growth of 16.2 percent in the latest quarter, according to data compiled by Factset. However, analysts surveyed by FactSet expect earnings to shrink 1.3 percent in the first quarter and then to grow just 1.3 percent and 2.6 percent in the second and third quarters, respectively.
LOOKING GOOD: Upscale clothing company Ralph Lauren surged on growth in Asia and Europe. The company’s most recent fiscal results beat Wall Streets’ forecasts. More importantly, it raised its forecast despite some fears about an economic slowdown hitting Europe and Asia. The stock rose 7.9 percent to $123.63.
Estee Lauder, which also reported better results and expects growth in Asia, rose 12.8 percent to $153.66.
HAMMERED: Higher spending on marketing and pressure from tariffs knocked profits down 68 percent at Church & Dwight, a major maker of household products. The results fell short of Wall Street’s forecasts.
Church & Dwight, which owns the Arm & Hammer brand, said tariffs hurt its earnings, though it has raised its prices to offset the problem. Church & Dwight’s stock fell 8 percent to $60.14.
ENERGY: US crude oil fell 1.2 percent to $53.94 per barrel in New York. Brent crude, used to price international oils, 0.2 percent to $62.38 per barrel in London.
OVERSEAS: Germany’s DAX rose 1.7 percent. The British FTSE 100 rose 0.2 percent. France’s CAC 40 rose 1.5 percent. Japan’s Nikkei 225 fell 0.2 percent. In Asia, most markets were closed for the lunar new year.