Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

While you were sleeping: Caterpillar upgrades outlook

While you were sleeping: Caterpillar upgrades outlook

By Margreet Dietz

July 26 (BusinessDesk) - 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.

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."

In 3.38pm trading in New York, the Dow Jones Industrial Average rose 0.5 percent, while the Nasdaq Composite Index eked out a 0.04 percent gain. In 3.24pm trading, the Standard & Poor’s 500 Index rose 0.3 percent.

The S&P 500 climbed to a record 2,481.24, while the Nasdaq rose to a record 6,425.45.

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 Chair 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 those of McDonald’s, recently up 5.8 percent and 5.2 percent respectively, outweighed slides in shares of 3M and those of United Technologies, recently down 5.6 percent and 2.1 percent respectively.

Shares of Caterpillar rallied after the maker of heavy equipment reported quarterly earnings that bettered expectations and upgraded its full-year sales and profit 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 US$42 billion to US$44 billion with a midpoint of US$43 billion, up from its April forecast for US$38 billion to US$41 billion with a midpoint of US$39.5 billion.

It now expects full-year profit per share of about US$3.50 at the midpoint of the sales and revenues outlook range, or adjusted profit per share of about US$5.00, it said. That’s up from a previous guidance for about US$2.10 per share at the midpoint of the sales and revenues outlook, or adjusted profit per share of about US$3.75.

"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.

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

In the second quarter, agriculture sales increased 5 percent on a 5-percent benefit from volume and a 1-percent benefit from local price, partially offset by a 1-percent 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."

Shares of DuPont traded 1.2 percent higher as of 3.28pm in New York.

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

(BusinessDesk)

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: