Stocks add to string of records; Nasdaq bucks trend to edge lower

U.S. stocks mostly rose on Tuesday, with the S&P 500 and the Dow advancing to new records as optimism appeared to grow ahead of the start of the earnings season, which will provide concrete insight into the state of U.S. corporations. However, the tech-laden Nasdaq bucked the trend to slip into negative territory.

What are stocks doing?

The Dow Jones Industrial Average DJIA, +0.25% rose 46 points, or 0.2%, to 22,807. The S&P 500 SPX, +0.18% added 3 points, or 0.1%, to 2,548. The Nasdaq Composite Index COMP, +0.00% shed 5 points to 6,574. All three benchmarks touched fresh intraday all-time peaks before pulling back from those session highs.

Highlighting a recent uptrend in equities, the S&P 500 has risen in nine of the past 11 sessions, while the Dow is on track for its eighth gain of the past 10. The Nasdaq has gained in 10 of the past 11.

Consumer staples, among the best gaining sectors, were buoyed by Wal-Mart Stores Inc. WMT, +5.04% which at an investor meeting said it would continue its strategy of focusing on domestic existing stores and e-commerce growth to boost sales. The stock surged 4.8% and was one of the biggest boosts on the Dow.

What are market participants saying?

“Feels like macro/quant funds [are] selling tech to buy oil names,” said Ian Winer, head of the equities division at Wedbush Securities, on Nasdaq’s weakness.

“We think valuations are fair and we’re not expecting any big surprises out of earnings season, which should be pretty strong,” said Michael Matousek, head trader at U.S. Global Investors Inc. in San Antonio. “I don’t think we’re going to see major moves to the upside or the downside until earnings, because people are waiting to see where major companies like [Facebook Inc.] FB, -0.56% come in, but there is optimism.”

What could move the markets?

Buying sentiment could be dampened by the wait for the start of the third-quarter earnings season. That kicks off in earnest on Wednesday with reports from BlackRock Inc.BLK, +0.32% and Delta Air Lines Inc.DAL, +2.57%J.P. Morgan Chase & Co.JPM, +0.57% and Citigroup Inc.C, -0.35% will report Thursday, followed by Bank of America Corp.BAC, -0.08% and Wells Fargo & Co.WFC, +0.97% on Friday.

Optimism over the season is running high, with multiple investment banks forecasting it to fuel gains over the fourth quarter of the year.

The International Monetary Fund lifted its forecast for global growth but also warned of downside risks going forward. The IMF called on China to take more step to curb its credit growth, and for a “concentrated effort” to clean up the balance sheets of European banks.

In the latest economic data, sentiment among small-business owners stumbled in September as expectations for sales and economic growth plunged.

Which stocks are in focus?

Procter & Gamble Co. PG, -0.97% shares fell 1.3%. At the annual general meeting on Tuesday, a proxy vote among shareholders resulted in all of the company’s directors being re-elected, meaning that activist investor Nelson Peltz wasn’t named a director.

Nvidia Corp.NVDA, +1.94% rose 1.6% after the graphics chip maker unveiled new hardware to be used in self-driving taxis. The stock, which has nearly tripled over the past 12 months, hit an all-time high.

KalVista Pharmaceuticals Inc. KALV, +49.66% surged 50% after Merck & Co. MRK, +0.12% bought a 9.9% ownership stake in the company, paying $8.50 a share. The stock closed Monday at $7.35. Merck was flat.

Express ScriptsESRX, -1.86% said it would buy the privately held EviCore for $3.6 billion. Shares fell 1.8%.

Energy stocks were among notable movers. Hess Corp.HES, +1.33% rose 1.3% while Devon Energy Corp. DVN, +1.74% was up 1.8%.

What are other assets doing?

European stocksSXXP, -0.01% finished mostly lower, with Spain’s IBEX benchmark IBEX, -0.92% slipping ahead of a key speech by Catalan President Carles Puigdemont. He’s due to make an address to the region’s parliament later in the day, in which some think he could declare independence for the region. Such a move could trigger the Spanish government to take control of the Catalan government, which may result in more unrest in the region.

Asian markets traded mostly higher.

Oil futures CLX7, +2.84% jumped and gold futures GCZ7, +0.66% gained.

Read:OPEC urges U.S. shale to take ‘shared responsibility’ to cut oil output

The ICE U.S. Dollar Index DXY, -0.50%was down 0.4% as the dollar fell against the euro EURUSD, +0.5621% the British pound GBPUSD, +0.5099% and the yen USDJPY, -0.43%

--Barbara Kollmeyer contributed to this report.

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