Stocks turn higher as investors pore over earnings reports

This June 16, 2021 file photo shows the facade of the New York Stock Exchange. Stocks are off to a mixed start on Wall Street, Tuesday, Aug. 3, as traders weigh another big set of company earnings reports, which have been coming in largely ahead of analysts' forecasts. (AP Photo/Richard Drew, File)

Stocks on Wall Street shook off a sluggish start and turned broadly higher Tuesday, on pace to more than make up their losses from a modest pullback a day earlier.

Investors weighed another large swath of company earnings reports, including quarterly snapshots from Ralph Lauren and Clorox. While earnings have been strong, Wall Street remains cautious over COVID-19 and its potential impact on a still recovering economy amid the spread of the more contagious delta variant.

The S&P 500 was up 0.8% as of 3:35 p.m. Eastern after a mostly listless morning. The benchmark index was within striking distance of eclipsing the all-time high it set early last week.

The Dow Jones Industrial Average rose 269 points, or 0.8%, to 35,108. and the Nasdaq composite index rose 0.5%.

Technology, health care, financial and industrial stocks drove much of the rally. Communications companies were the only laggard.

The delta variant is still reason for caution, but it likely won’t have a significant impact on the economy's reopening and recovery because hospitalizations are relatively tame and fatalities are very low in comparison to infections, said Jason Pride, chief investment officer of private wealth at Glenmede.

“We may still deal with the lingering residual effects of the pandemic,” Pride said. “You’ve probably got a period of time where the economy has to restitch itself back together.”

Investors are in the midst of earnings season, with more than 100 companies in the S&P 500 index reporting their results this week. So far earnings have been strong, with roughly nine out of every 10 companies beating analysts' expectations.

Clorox slumped 8.8% after reporting results that fell short of forecast and releasing a disappointing outlook.

Solid financial results helped lift several other companies. Ralph Lauren climbed 5.9% after handily beating analysts’ fiscal first-quarter profit forecasts as sales rebounded. Columbia Sportswear rose 0.3% after reporting a surprise second-quarter profit.

Activision Blizzard fell 3.9% after the head of Blizzard Entertainment said he would resign, effective immediately. Blizzard, maker of popular video games such as “Overwatch” and “World of Warcraft,” has been accused in a lawsuit of having a toxic work environment which has caused walkouts by employees.

PepsiCo rose 0.2% after the beverage and snacks giant said it would spin off its Tropicana and other fruit juices into a separate company in a $3.3 billion deal.

Online broker Robinhood jumped 24.2% and topped its IPO price for the first time since its stock began trading last Thursday.

Bond yields were relatively stable. The yield on 10-year Treasury inched up to 1.18% from 1.17% from the the day before. Less than a month ago, the 10-year note was trading around a yield of 1.35%.

Investors will be watching closely when the Labor Department releases its July jobs report Friday. Economists surveyed by FactSet forecast that the employers created 837,500 jobs last month and the unemployment rate fell to 5.7%.