Most companies so far this reporting season have beaten forecasts, but that’s usually the case. And expectations were low coming into this season, with analysts calling for the worst decline in S&P 500 earnings per share in three years.

Among the winners on Wall Street Tuesday was Caterpillar. It rose 8.9 per cent after blowing past analysts’ forecasts for earnings during the spring. It was the stock pushing up the most on the Dow, where Caterpillar can have more of an impact than on the S&P 500 because of its big stock price.

Arista Networks jumped 19.7 per cent for the biggest gain in the S&P 500 after it also beat expectations for profit and revenue in the latest quarter.

Reports on the economy Tuesday came in mixed. The number of job openings advertised across the country dipped slightly in June, when economists were expecting a rise. But the job market broadly remains solid, propping up the rest of the economy and keeping it out of a recession so far.

One report on the manufacturing industry from the Institute for Supply Management said it contracted at a slightly worse pace in July than economists expected, but not as badly as it did in June. A separate report from S&P Global also said US manufacturing is continuing to decline.

“However, producers are clearly shrugging off recession fears and planning for better times ahead,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Other profit reports scheduled for later in the week could have more of an impact. Amazon and Apple are scheduled to report on Thursday, and because they’re two of the biggest stocks by market value, their movements pack more punch on the S&P 500 than other companies’. Both have also soared this year, along with other Big Tech stocks.

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Fed Chair Jerome Powell has also pointed to Friday’s upcoming report on the overall US job market as an important data point. Growth needs to be strong enough to keep a lid on worries about a possible recession. But a reading that’s too hot could also mean upward pressure on inflation, which could push the Fed to get more aggressive about rates.

High rates undercut inflation by slowing the overall economy and dragging on prices for stocks and other investments. The Fed has already hiked its main rate to its highest level in more than two decades, a jolting shock after the rate began last year at virtually zero.

In stock markets abroad, indexes were mostly lower in Europe and mixed in Asia.

In the bond market, the yield on the 10-year Treasury rose to 4.03 per cent from 3.97 per cent late Monday. It helps set rates for mortgages and other important loans.

AP

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