U.S. Stocks Extend Gains

By Corrie Driebusch And Saumya Vaishampayan 

        U.S. stocks rose Tuesday, extending a rally that propelled the S&P 500 to its biggest three-day advance of the year.
        The Dow Jones Industrial Average climbed 69 points, or 0.4%, to 18046. The S&P 500 edged up 8.8 points, or 0.4%, to 2108 and the Nasdaq Composite gained 37 points, or 0.7%, to 5108.
        After several weeks of world news dominating trading in U.S. markets, corporate earnings started to play a slightly bigger role on Tuesday. Still, traders said stock-market moves will likely continue to be dictated by worries about the timing of a rate increase by the Federal Reserve and developments in Greece and China.
        "While earnings will probably mean more now, I think the narrative will continue to be dominated by the Fed and the macro picture," said R.J. Grant, associate director of equity trading at KBW Inc. After years of stimulus efforts, the Fed is widely expected to begin to raise short-term rates later this year.
        On Tuesday, J.P. Morgan Chase & Co. said its second-quarter profit rose 5.2% as earnings and revenue beat expectations. Shares of the bank gained 1.1%, adding about five points to the Dow industrials.
        Also in the financial sector, Wells Fargo & Co. said its second-quarter profit slipped. Its shares edged up 0.8%.
        Shares of Johnson & Johnson slumped 1%, dragging down the Dow industrials index by six points, after the company reported continued competition and a slump in sales for its hepatitis C treatment in the second quarter. Its stock declined even as J&J nudged up its earnings guidance for the year.
        Earnings for S&P 500 companies are forecast to slip 4.5% in the second quarter, according to FactSet. That would mark the first fall since the third quarter of 2012. Analysts had similarly forecast a decline in first-quarter earnings amid lower oil prices and a strong dollar. In the end, profits rose by 0.8%.
        Doug Cote, chief market strategist at Voya Investment Management, said he expects companies to surpass the low expectations set by analysts, much like in the first quarter, and with total S&P earnings growth of about 1%. "It's nothing to write home about, but certainly not negative, " he said. That will help propel the S&P 500 to his target of 2200 by year-end.
        In other corporate news, shares of Twitter Inc. jumped more than 8% in early trading after a fake story about a potential bid for the company appeared on a website that was made to look like Bloomberg's site. Shares recently traded 3.3% higher.
        Stocks in the U.S. and Europe have rallied in recent sessions, fueled by optimism that a deal between Greece and its creditors could be reached. That deal was secured Monday and gave Greece a fighting chance of staying in the eurozone. Investors are waiting to see whether the Greek government will be able to pass the tough austerity measures necessary to receive the bailout.
        Greek Prime Minister Alexis Tsipras "has a very short window to implement some of the agreed-upon reforms," said Mr. Cote. The quiet action in the U.S. and Europe is a reflection of the uncertainty about Greece's ability to pass the austerity measures, he said. Still, he ultimately expects the deal to work out.
        "The eurozone wants a deal to get done, and Greece needs a deal to get done," Mr. Cote said.
        European stocks rose slightly Tuesday. France's CAC-40 added 0.7% and Germany's DAX gained 0.3%.
        U.S. stocks rose Monday, marking the third session of gains for the S&P and Dow. The S&P 500 added 1.1% to 2099.60 and posted its largest three-day advance since Dec. 22. The Dow rallied 1.2% to 17977.68 for its biggest three-day gain since Feb. 5.
        With Monday's rally, the S&P is up 2% and the Dow is up 0.9% for the year.
        Investors Tuesday also digested retail sales, which unexpectedly fell 0.3% in June from the prior month, the Commerce Department said. Figures for the prior two months were also revised down. Economists surveyed by The Wall Street Journal had expected a 0.2% increase in June.
        Crude-oil futures climbed as investors considered the implications for oil markets of a nuclear agreement between Iran and six world powers. The question is how successfully Tehran can increase production and sell crude in the face of competition. Crude-oil futures rose 1% to $52.74 a barrel.
        In other markets, gold futures slipped 0.2% to $1153.40 an ounce.
        The yield on the 10-year Treasury note fell to 2.416% from 2.430% on Monday. Yields fall as prices rise.
        Write to Corrie Driebusch at corrie.driebusch@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com
        (END) Dow Jones Newswires

        July 14, 2015 14:41 ET (18:41 GMT)

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