While you were sleeping: Caterpillar, McDonald's help push Dow up 100pts

Wall Street moved higher, pushing the S&P 500 and the Nasdaq to fresh record highs, amid better-than-expected corporate earnings, including from Caterpillar and McDonald's.

Also underpinning the mood was a Conference Board report showing US consumer confidence climbed to the highest level since 2000.

"This brightens the outlook for the economy as we enter the second half of the year," Chris Rupkey, chief economist at MUFG in New York, told Reuters.

"We expect Fed[eral Reserve] officials will continue with their gradual pace of rate hikes secure in the knowledge that a confident consumer means that more spending is on the way."

At the close of trading in New York, the Dow Jones Industrial Average rose 100.26 points, or 0.5%, to 21,613.43. The Nasdaq Composite Index eked out a 0.02% gain to 6412.17, while the Standard & Poor's 500 Index advanced 0.3% to 2477.13.

The S&P 500 climbed to a record 2481.24 during the session, while the Nasdaq also rose to a record 6425.45.

Fed unlikely to move
US Federal Reserve policy makers began their two-day meeting, during which they are not expected to increase interest rates but might offer clues about plans to reduce their balance sheet.

"Any major policy announcement is more likely when chairwoman Janet Yellen faces the press following the September meeting," J&E Davy analyst David McNamara wrote in a note, Bloomberg reported.

"For now the Fed remain on track for a couple more rate hikes at least this year, with most members believing the recent softness in inflation to be temporary."

In the Dow, rallies in shares of Caterpillar and McDonald's, up 5.9% and 4.8% respectively, outweighed slides in shares of 3M and United Technologies, recently down 5.6% and 2.1% respectively.

Caterpillar rallied after the maker of heavy equipment reported quarterly earnings that bettered expectations and upgraded its full-year sales and profit outlook.

Caterpillar lifts outlook
"As a result of increased demand across many end markets and disciplined cost control, Caterpillar is raising its 2017 outlook," the company said in a statement.

"Some risks remain in the outlook, including weakness in the Middle East and Latin America, as well as geopolitical and commodity risk."

The company said it is raising its full-year 2017 expectations for sales and revenues to a range of $US42 billion to $US44 billion with a midpoint of $US43 billion, up from its April forecast for $US38 billion to $US41 billion with a midpoint of $US39.5 billion.

It now expects full-year profit per share of about $US3.50 at the midpoint of the sales and revenues outlook range, or adjusted profit per share of about $US5.00, it said.

That's up from a previous guidance for about $US2.10 per share at the midpoint of the sales and revenues outlook, or adjusted profit per share of about $US3.75.

"Right now, it's kind of risk on," Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts, told Reuters.

"We've seen earnings come, in aggregate, well above what was expected. So basically the corporate fundamentals are ratifying what the market has been saying all along," McMillan said.

DuPont rises on result
"Shares of DuPont, which is set to merge with Dow Chemical, gained 1.4% after the company posted better-than-expected quarterly earnings bolstered by seeds and pesticides revenue.

In the second quarter, agriculture sales increased 5% on a 5% benefit from volume and a 1% benefit from local price, partially offset by a 1% negative impact from portfolio, DuPont said in a statement. Agriculture revenue accounts for about half of the company's total.

"Volume growth was driven by a benefit from the timing of seed deliveries, including the route-to-market change in the southern US, increased insecticide and fungicide sales, higher soybean sales in North America, and increased sunflower and corn seed sales in Europe," the company said.

"This growth was partially offset by the expected decline in corn volume related to reduced corn area in North America."

US crude rose 3.3% to $US47.89 a barrel, extending gains from Monday, when Saudi Arabia – the world’s top oil exporter – said it would limit oil exports in August. It was crude’s biggest one-day gain since November.

In Europe, the Stoxx 600 Index ended the session with an advance of 0.4% from the previous close. Germany's DAX Index rose 0.5%, while France's CAC 40 Index added 0.7% and the UK's FTSE 100 Index gained 0.8%.

(BusinessDesk)