Wall Street rallies toward an all-time high - AP News

NEW YORK (AP) — The U.S. stock market is closing in on an all-time high on Tuesday.

The S&P 500 climbed 0.6% and is on track to finish the day above its record closing level set in August. Even with worries about war, high inflation and cranked-up pressure from the bond market continuing to weigh on it, the backbone of many 401(k) accounts has soared 23% since hitting a bottom in late March.

The Dow Jones Industrial Average was up 201 points, or 0.4%, as of 1:23 p.m. Eastern time, while the Nasdaq composite was adding 0.5% to its own all-time high set the day before. The record-high stock prices are helping investors feel better about their finances, or at least less bad, when Americans are generally feeling more discouraged about keeping up with the fast-rising cost of living.

U.S. stocks flirt with record highs.

Many of the fears that sent the U.S. stock market to its bottom in March, sparked by the war with Iran, have indeed come true. Oil prices have jumped, which has made inflation worse. That in turn helped send yields higher in bond markets worldwide, which is threatening to slow the economy by making it more expensive for everyone to borrow money and by making investors less willing to pay high prices for stocks.

But despite all those challenges, one vital source of support has remained resolute for the U.S. stock market: the relentless ability for U.S. companies to make bigger profits.

Lamb Weston, which sells frozen fries and other potato products, said on Tuesday that its profit and revenue during its latest quarter topped its projections, for example. The results also beat analysts’ expectations, and its stock rallied 11.1%.

CEO Mike Smith said the company continues to deal with unexpected increases in freight and other expenses as inflation remains high. But the company nevertheless raised its forecast for an underlying measure of profit for its full fiscal year.

It’s not just potato products proving to be more profitable. All kinds of companies are lining up to report soon how much profit they made from July through September, and expectations are high.

Analysts expect companies in the S&P 500 to deliver overall growth of nearly 30% in earnings per share from a year earlier, according to FactSet. If they’re correct, it would be the third straight quarter of growth better than 25%.

And along with interest rates, how much profit companies are making are the big levers that help to set prices for stocks.

Delta Air Lines will report its third-quarter results on Friday, with several of the country’s biggest banks headlining the following week.

Stocks also faced less pressure Tuesday as the price of Brent crude oil, the international standard, steadied. It fell 0.1% to 100.21 per barrel. That’s down from nearly $110 a few weeks ago, and the easing removes some of the pressure from inflation.

It also helped send the yield on the 10-year Treasury down to 5.28% from 5.31% late Monday. Yields worldwide have recently been hitting their highest levels in years or even decades.

On Wall Street, stocks involved in the artificial-intelligence frenzy have been behind much of the market’s record-setting run, and Constellation Energy jumped 15% on Tuesday amid the tidal wave.

It announced a long-term deal to supply Google with about as much electricity as a new nuclear reactor makes. The boom in AI data centers has made not just electricity more in demand but also construction crews and materials throughout the economy.

Elsewhere on Wall Street, Option Care Health soared 33.1% after CD&R and McKesson said they’re buying the provider of infusion services. The two are paying $32.05 for each Option Care Health share, valuing it at roughly $5.8 billion.

CDR is a private investment firm. Shares of McKesson, the healthcare services company, added 0.3%.

In stock markets abroad, indexes ticked higher in Europe as yields continue to swing in their bond markets amid concerns about high government debts and tight budgets.

In France, tens of thousands of demonstrators marched in support of protests by students demanding more funding for schools.

In Asia, Japan’s Nikkei 225 jumped 1.1%, and Hong Kong’s Hang Seng climbed 1%, but South Korea’s Kospi dropped 0.9%.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.

An earlier version of this story incorrectly identified Constellation Energy.