Robust results push Wall Street higher amid trade war

Wall Street continued to push higher as the earnings season produced robust results.

While the escalating tariff war between the US and China weighs on sentiment, large US.companies have largely shaken off the impact.

Most have reported quarterly profit growth of more than 20% over the second quarter.

“The market continues to grind higher,” Credit Suisse Group equity trader Rob Bernstone says. “It seems extraordinary resilient right now.”

At the close, the S&P 500 rose 0.35% to 2850.40, its third-highest close ever, while the Dow Jones Industrial Average was up 39.60 points, or 0.2%, to 25,502.18. The Nasdaq Composite rose 0.6% 7859.68.

Berkshire Hathaway shares rose 2.9% after second quarter earnings surged, boosted by insurance underwriting and a change to accounting rules. 

Tyson Foods added 3.3% after reporting a higher profit despite challenges related to oversupply and pricing due to tariffs.

Facebook seeks financial info
Facebook climbed 4.4% after the Wall Street Journal reported it had asked large US banks to share detailed financial information about their customers as part of an effort to offer new services to users.

Among decliners, shares of Newell Brands – owner of New Zealand’s Sistema plastics – fell 14% after reporting falling quarterly sales.  

In other corporate news, PepsiCo’s longtime leader Indra Nooyi, 62, will step aside as chief executive on October 3.

Over the past dozen years, she pushed the company out of its soft drinks base into healthier snack foods. Revenue increased 81% during her tenure to $US63.5 billion last year.

She will remain chairman until early 2019 and will be replaced as CEO by Ramon Laguarta, a 22-year PepsiCo veteran.

Investors are looking ahead to inflation data later this week, after some said Friday’s jobs report indicated no signs that would accelerate the Federal Reserve’s pace of interest-rate increases.

The yield on the benchmark 10-year US Treasury note fell to 2.934% from 2.952% on Friday.

Oil prices rose on the back of reports that Saudi Arabian crude output unexpectedly fell in July and President Donald Trump announcing reimposed sanctions on Iran that could cut one million barrels a day in global exports.

US crude was 1.6% higher at $US69.55 a barrel, while Brent crude, the global benchmark, rose 1.1% to $US73.99 a barrel.

Iran sanctions reimposed
Officials said the sanctions, mooted when the US pulled out of the nuclear accord with Iran, would remain in effect until it ended supports for militant groups in the Middle East and its enrichment of uranium.

“We are intent on cutting off the regime’s access to resources that they have systematically used to finance terror, fund weapons proliferation, and threaten peace and stability in the region,” a senior administration official said.

The measures will prohibit Iran’s access to US dollars, sanction Iran’s trade in gold and precious metals, outlaw the purchase of Iran’s sovereign debt, and sanction Iran’s automotive sector.

Far tougher steps will come into force on November 5, when the US tries to cut off Iran’s oil exports and imposes sanctions on Iran’s shipping.

Gold futures fell to near 2018 lows as the US dollar gained ground. Reports said Iranian were hoarding gold ahead of the sanctions.

December futures settled 0.4% lower at $US1217.70 an ounce.

Global markets mainly weaker
Elsewhere, sharemarkets were mainly weaker. The Stoxx Europe 600 dropped 0.1%.. Germany’s economics ministry blamed trade uncertainty for helping drive manufacturing orders down 4% in June.

Germany’s DAX eased 0.1%, France’s CAC 40 edged down 0.03% and the UK FTSE 100 rose 0.06%.

In Asia, the Shanghai Composite Index fell 1.3% to its lowest level since February 2016. Japan’s Nikkei Stock Average edged down 0.1% and Hong Kong’s Hang Seng closed up 0.5%.