US STOCKS-Wall Street approaches record high on earnings optimism

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* Coca-Cola gains on profit beat, forecast raise
* United Tech gains on quarterly profit beat
* Trump, U.S. Congress leaders reach deal on debt limit
* Indexes: Dow +0.58%, S&P 500 +0.56%, Nasdaq +0.37%

(Updates to afternoon)
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, while a debt ceiling and
budget deal between President Donald Trump and Congress also
buoyed sentiment.
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 5.6% to a record high after the
fizzy drink maker beat quarterly earnings expectations and
raised its full-year organic revenue forecast. Fellow Dow component United Technologies Corp UTX.N gained
1.2% after raising its full-year profit and sales outlook.
The two-year federal spending between Trump and U.S.
congressional leaders would avert a feared government default
later this year, but 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 rates at its
policy-setting meeting next week have made investors more
willing to buy stocks, helping push the S&P 500 and Nasdaq on
Tuesday to less than 1% from record highs set earlier this
month.
The European Central Bank (ECB) 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. At 2:19 pm ET, the Dow Jones Industrial Average .DJI was
up 0.58% at 27,328.79 points, while the S&P 500 .SPX gained
0.56% to 3,001.88.
The Nasdaq Composite .IXIC added 0.37% to 8,234.22.
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, were also in focus on
Wall Street.
"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 CFRA chief market strategist
Sam Stovall.
Overall profits of S&P 500 companies are now expected to
rise about 1% in the second quarter, according to Refinitiv,
improving from a small decline estimated previously.
The S&P 500 financial index .SPSY rose 1.1%, while the
materials index .SPLRCM climbed 1.7%.
Travelers Companies Inc TRV.N fell 2.0% after the
insurer's second-quarter profit missed estimates, as
weather-related losses led to an 18% drop in underwriting gain.
Hasbro Inc HAS.O surged 8.78% 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
1.70-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and three new lows;
the Nasdaq Composite recorded 44 new highs and 103 new lows.

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