US STOCKS-Earnings and trade optimism push Wall St toward record high

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* Coca-Cola gains on profit beat, forecast rise
* United Tech gains on quarterly profit beat
* Trump, U.S. Congress leaders reach deal on debt limit
* Indexes: Dow +0.65%, S&P 500 +0.68%, Nasdaq +0.58%
*

(Updates to close of trading)
By Noel Randewich
July 23 (Reuters) - The S&P 500 and Nasdaq approached record
highs on Tuesday, lifted by upbeat quarterly reports from
Coca-Cola and United Technologies and on optimism the United
States would resolve its trade conflict with China.
Stocks extended gains late in the session after Bloomberg
reported that U.S. Trade Representative Robert Lighthizer would
travel to Shanghai next week for face-to-face trade meetings
with Chinese officials. White House economic adviser Larry Kudlow told reporters on
Tuesday the in-person talks to resolve the U.S.-China trade deal
were a good sign.
The U.S. corporate earnings season is off to a strong start,
with nearly 80% of 104 S&P 500 companies topping earnings
expectations so far in the second quarter, according to
Refinitiv IBES data.
Coca-Cola Co KO.N surged 6.1% to a record high after the
drink maker beat quarterly earnings expectations and raised its
full-year organic revenue forecast. Fellow Dow component United Technologies Corp UTX.N gained
1.5% after raising its full-year profit and sales outlook.
Also helping sentiment, U.S. President Donald Trump and U.S.
congressional leaders reached a deal on Monday on a two-year
extension of the debt limit and federal spending caps that would
avert a feared government default later this year. It would,
however, add to rising budget deficits. "The reaching of a debt ceiling agreement is positive news
for all sectors at large, because it's one additional question
that gets removed from the outlook for growth and equities in
general," said Mike Loewengart, vice president of investment
strategy at E*Trade Financial in New York.
Expectations that the Federal Reserve will cut interest
rates at its policy-setting meeting next week have made
investors more willing to buy stocks. The S&P 500 and Nasdaq are
less than half a percent below their record high closing levels
set earlier this month.
The European Central Bank is expected to signal easier
monetary policy when it meets on Thursday. The International
Monetary Fund lowered its forecast for global growth this year
and next, warning that more U.S.-China tariffs, auto tariffs or
a disorderly Brexit could slow growth further. The Dow Jones Industrial Average .DJI rose 0.65% to end at
27,349.19, while the S&P 500 .SPX gained 0.68% to 3,005.47.
The Nasdaq Composite .IXIC added 0.58% to 8,251.40.
Investors also anticipate quarterly reports from top-tier
growth companies Facebook Inc FB.O on Wednesday and Amazon.com
Inc AMZN.O and Alphabet Inc GOOGL.O , both on Thursday.
"If they disappoint on earnings, that could have a negative
impact on (wider) share prices because they represent such a
large portion of the market," said Sam Stovall, CFRA chief
market strategist.
Overall profits of S&P 500 companies are expected to rise
about 1% in the second quarter, according to Refinitiv,
improving from a small decline estimated previously.
The S&P 500 industrials index .SPLRCI rose 1.2%, while the
materials index .SPLRCM climbed 2.0%.
Shares of Travelers Companies Inc TRV.N fell 1.5% after
the insurer's second-quarter profit missed estimates. It said
weather-related losses led to an 18% drop in underwriting gains.
Hasbro Inc HAS.O surged 9.95% and was the biggest gainer
among S&P 500 companies after the toymaker reported
better-than-expected quarterly revenue. Advancing issues outnumbered declining ones on the NYSE by a
1.86-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored advancers.
The S&P 500 posted 24 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 52 new highs and 117 new lows.
Volume on U.S. exchanges was 6.0 billion shares, compared
with the 6.4 billion average for the full session over the last
20 trading days.

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