Stocks notched solid gains on Wall Street Tuesday as investors welcomed surprisingly good quarterly results from some of the nation's biggest companies.
Strong earnings from UnitedHealth Group, JPMorgan Chase and other companies helped power the market's broad gains, erasing modest losses from a day earlier.
Investors are looking to the wave of quarterly report cards due out over the next few weeks to give them a clearer picture of what impact the trade war between the U.S. and China is having on corporate profits and the broader economy.
The encouraging earnings reports came with a spate of surprisingly good forecasts for the rest of the year, which helped ease concerns about a slowdown due to the costly trade conflict.
"That was what everybody was afraid of," said JJ Kinahan, chief market strategist for TD Ameritrade. "Instead, we got 'no, the future looks good.'"
The S&P 500 index climbed 29.53 points, or 1%, to 2,995.68. The benchmark index is now 1% below its all-time high set in July.
The Dow Jones Industrial Average rose 237.44 points, or 0.9%, to 27,024.80. The Nasdaq gained 100.06 points, or 1.2%, to 8,148.71. Small-company stocks also bounced back after leading the decline a day earlier. The Russell 2000 index picked up 17.87 points, or 1.2%, to 1,523.30.
Bond prices fell. The yield on the 10-year Treasury rose to 1.77% from 1.75% late Friday. Bond markets were closed Monday for Columbus Day.
Technology, health care, financial and communication services stocks drove much of Tuesday's broad rally, which gave the market its fourth gain in five days. Utilities and makers of consumer goods fell as investors regained an appetite for more risk. The sectors are considered safe-play holdings and usually lag the market when investors are more confident.
The latest batch of company earnings reports gave investors a confidence boost that, for the moment, sidelined concerns about whether Washington and Beijing will be able to work out a trade deal.
On Friday, the U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
The U.S. did not, however, cancel plans for more tariffs in December and the sticking points of intellectual property and trade secrets still hang over the dispute.
"There really isn't any pen to paper, it's just people talking and nothing definite," Kinahan said. "The earnings are definite."
UnitedHealth Group jumped 8.2%, leading all S&P 500 stocks, after the company hiked its 2019 profit forecast following third-quarter results that beat Wall Street's expectations.
Traders also bid up shares in other health insurers. Anthem gained 6%, Cigna added 5.7% and Humana rose 4.8%.
Johnson & Johnson gained 1.6% after it raised its profit forecast for the year following solid third quarter results.
JPMorgan Chase rose 3% after the bank beat Wall Street's third quarter profit forecasts. Citigroup also delivered solid results, lifting its shares 1.4%.
Other major banks, including Goldman Sachs, Wells Fargo reported mixed results, but their shares still rose. Goldman Sachs added 0.3%, while Wells Fargo gained 1.7%.
Investors have been worried that corporate profits could be hampered by the U.S. trade disputes with China and growing economic uncertainty. Corporate earnings are expected to contract by nearly 5% during the third quarter, according to FactSet.
That forecast could soften as more companies report results for the third quarter. Similar forecasts were made ahead of both the first and second quarter reporting periods and companies in the S&P 500 managed to deliver only a modest contraction each time.
Investors are in for a busy few days for corporate earnings, including Bank of America, railroad giant CSX, Netflix and IBM on Wednesday.
Benchmark crude oil fell 78 cents to settle at $52.81 a barrel. Brent crude oil, the international standard, dropped 61 cents to close at $58.74 a barrel. Wholesale gasoline was unchanged at $1.61 per gallon. Heating oil declined 1 cent to $1.91 per gallon. Natural gas rose 6 cents to $2.34 per 1,000 cubic feet.
Gold fell $14.10 to $1,477.60 per ounce, silver fell 32 cents to $17.31 per ounce and copper fell 2 cents to $2.60 per pound.
The dollar rose to 108.84 Japanese yen from 108.37 yen on Monday. The euro strengthened to $1.1035 from $1.1031.
Major stock indexes in Europe closed mostly higher.