NEW YORK (AP) — Solid earnings from a broad swath of U.S. companies pushed the stock market higher on Tuesday.
Ameriprise Financial, a wealth management company, surged after posting earnings that exceeded Wall Street's expectations. The company also said it would buy back an additional $2.5 billion of its own stock and raise its dividend. Cummins, a maker of large diesel engines, jumped after the company said a surge in North American sales sent its earnings higher.
Just over half the companies in the Standard & Poor's 500 index have now released their earnings for the first quarter and, with the occasional exception, the reports have contained enough good news to drive stock prices higher. The S&P 500 has gained 2.1 percent since April 14, and the index is approaching its all-time high following a pullback at the start of the month prompted by a sell-off in formerly highflying Internet and biotechnology stocks.
"Corporate earnings are pretty good," said Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research. "Once the market got back on its feet after that dip that we had, it seems to be poised to hit a new record high very soon."
The Standard & Poor's 500 index rose 8.90 points, or 0.5 percent, to 1,878.33. The index is 12 points below its record high of 1,890.89 set April 2.
The Dow Jones industrial average climbed 86.63 points, or 0.5 percent, to 16,535.37. The Nasdaq composite gained 29.14 points, or 0.7 percent, to 4,103.54.
Analysts currently expect earnings for S&P 500 companies to grow by 1.4 percent in the first quarter, according to data from S&P Capital IQ. Although that is lower than the 5.2 percent earnings growth recorded in the same period a year ago, expectations for the period were low after an unusually harsh winter.
Two weeks ago, analysts were expecting an overall decline in earnings, but those expectations have risen as more companies have reported earnings.
"Companies have learned a new religion," said Chris Bertelsen, chief investment officer at Global Financial Private Capital, a wealth management company. "That is, underpromise and overdeliver."
Ameriprise rose $6.04, or 5.8 percent, to $109.55. Financial stocks rose almost 1 percent, the biggest gain of the 10 industry groups that make up the S&P 500.
Cummins rose $5.61, or 3.9 percent, to $150.81 after the company posted its results and raised its sales outlook due to improving demand in North America.
Coach, a maker of handbags and other luxury goods, was among the day's losers. The company's stock fell $4.71, or 9.3 percent, to $45.71 after Coach said its earnings declined in the first three months of the year. Sales in North America came under pressure from competitors like Michael Kors.
Investors get more information on the U.S. economy and the Federal Reserve's thinking on Wednesday.
The Commerce Department will issue the first of three estimates of how fast the U.S. economy grew in the January-March quarter. Economists say a slowdown last quarter, caused mainly by a severe winter, is likely giving way to stronger growth that should endure through the rest of the year.
The Fed will release a statement after the conclusion of their its two-day meeting. Most economists expect that the Fed will reduce its monthly bond purchases by another $10 billion, to $45 billion a month. The Fed's stimulus has helped underpin a five-year rally in stocks.
The yield on the 10-year Treasury note was unchanged from Monday at 2.70 percent. The price of oil rose 44 cents, or 0.4 percent, to $101.28 a barrel.
Among other stocks making big moves:
— MGM Resorts International rose $1.96, or 8.5 percent, to $24.98 after the company said its first-quarter earnings soared, bolstered by continued strength in Macau and improved room bookings on the Las Vegas Strip.
— Sprint, the third-largest U.S. wireless carrier, gained 84 cents, or 11.3 percent, to $8.27 after the company posted a loss that was smaller than Wall Street analysts' had expected.
— Consol Energy rose $1.98, or 4.7 percent, to $43.93 after it announced earnings of $116 million in the first quarter. The company's profit was helped by growth in its oil and gas business.
— Twitter fell $4.16, or 10 percent, to $38.46 in after-hours trading after the company booked a net loss in the first quarter.