Dow Futures Near 22000 as Record Run Continues
The Dow Jones Industrial Average was poised for a fresh record Tuesday as strong earnings and signs of a brighter global economy lifted stocks.
Futures pointed to a 0.4% gain for the Dow, with investors watching to see if the blue-chip index closes at the 22000 milestone for the first time. The benchmark ended at its 30th record close of the year on Monday as corporate earnings in the second quarter have largely beat investors' expectations.
"Equities are in an earnings-driven market, surprising to the upside," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
Pharmaceutical company Pfizer Inc. beat profit estimates but missed on revenue as shares were up 0.5% in premarket trading. Index heavyweight Apple Inc.'s earnings report is due later Tuesday.
The Stoxx 600 Europe rose 0.3% midday, while the FTSE 100 was up 0.6%. A raft of upbeat earnings reports helped support markets in Europe.
Energy giant BP PLC rose 2.9% after the company returned to profitability in the second quarter on recovering oil prices. That helped boost the Stoxx 600 Europe Oil and Gas sector by 1%.
British aircraft-engine maker Rolls-Royce Holdings PLC also reported positive earnings after posting a first-half net profit, sending its shares 9.4% higher.
Moves in European stocks followed several economic data releases in the region. Eurozone economic growth gathered pace in the second quarter, coming in roughly in line with economists' expectations, data showed Tuesday. The reading marked the most consistently strong expansion of Europe's economy since bouncing back from the recession that had followed the global financial crisis.
While Europe's economy has beaten expectations recently, purchasing managers' indexes in various countries point to a plateauing of economic growth, said Markus Stadlmann, chief investment officer at Lloyds Banking Group.
A slightly disappointing reading on eurozone manufacturing Tuesday morning sent the euro down 0.3% to $1.1810, while U.K. manufacturing growth accelerated in July, initially lifting the British pound before it fell less than 0.1% to $1.3205. The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.2% after settling at its lowest level since August.
Improvement in a closely watched private gauge of manufacturing in China helped Asian shares gain. A reading from Caixan and IHS Markit rose for a second straight month in July and hit its highest level since March. In contrast, Monday's government reading slowed slightly.
"Today's unofficial PMI suggests that manufacturing activity has held up better than previously thought and points to a pickup in economic growth last month," said Julian Evans-Pritchard at Capital Economics.
Chinese stocks were already higher ahead of the report, and the Shanghai Composite Index closed up 0.6% after four consecutive sessions of gains. In Hong Kong, the Hang Seng Index hit fresh two-year highs, rising 0.8%, moving closer to 2015's peak.
Brent crude was last down 0.9% at $52.26 a barrel after earlier gains in oil prices lifted shares of energy companies in Australia and Hong Kong.
Australia's S&P/ASX 200 was up 0.9% after the index lagged behind once again in July. Commodities-focused stocks were posting outsize gains, with Woodside Petroleum rising 2.3%.
Australia's central bank on Tuesday warned about recent strength in the Australian dollar and left its cash rate target on hold at a record.
"The higher exchange rate is expected to contribute to subdued price pressures in the economy," Reserve Bank of Australia Gov. Philip Lowe said.
Korean stocks were also strong Tuesday. The Kospi was up 0.8% amid gains in index heavyweight Samsung as well as carriers Asiana and Korean Air.
Japan's Nikkei rose just 0.3% as Tokyo equities were capped by lagging tech stocks.
In government bonds, yields on 10-year Treasurys edged up to 2.306% from 2.292% on Monday, while German 10-year yields fell to 0.526% from 0.545% previously. Yields move inversely to prices.
Emma Court, Paul Hannon and Grace Zhu contributed to this article.
Write to Kenan Machado at email@example.com
(END) Dow Jones Newswires
August 01, 2017 08:54 ET (12:54 GMT)