U.S. stocks rose on Tuesday boosted by better-than-expected earnings and forecast raises from blue-chip companies including Coca-Cola and United Technologies, soothing concerns over the pace of economic growth.
Over the last 24 hours investors have reacted positively to a series of second-quarter reports, albeit often against expectations for profits, which have been lowered due to this year’s concerns over growth.
“Analysts notoriously underestimate how well these companies will do, and part of it is that companies intentionally lowball the analysts so that they can beat their estimates,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
Coca-Cola Co (KO.N) shares rose 4.9%, the most among stocks listed on the Dow Jones index, after the fizzy drink maker beat quarterly earnings expectations and raised its full year organic revenue forecast.
Its gains pushed the consumer staples sector .SPLRCS 0.9% higher, the biggest gainer among the major S&P sectors.
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