Financial-Markets                      08/04 15:54

   

   NEW YORK (AP) -- The U.S. stock market rallied to records on Tuesday as 
profits kept piling up for companies and as oil prices eased.

   The S&P 500 shot up 1.8%, and the main measure of Wall Street's health 
topped its prior all-time high set a couple months ago. The Dow Jones 
Industrial Average added 907 points, or 1.7%, to its own record set the day 
before, while the Nasdaq composite jumped 2.6%.

   Despite worries about high inflation, the war in Iran, frustration with the 
economy and a possible bubble in stock prices because of the boom in 
artificial-intelligence technology, Wall Street hit its latest apex and 
rewarded investors who remained patient because profits keep soaring for 
companies. Stock prices tend to follow the path of corporate earnings over the 
long term.

   Palantir Technologies helped lead the way and surged 29.5% after CEO Alex 
Karp said its overall revenue leaped 93% in what he called an "otherworldly" 
quarter. Besides reporting a stronger profit for the spring than analysts 
expected, the AI company also raised its revenue forecast for the full year of 
2026.

   Caterpillar climbed 5.6% after the heavy-equipment maker likewise reported 
stronger profit and revenue than analysts expected. It was the first time 
Caterpillar made more than $20 billion in sales and revenue in a quarter, and 
CEO Joe Creed said it's seeing strong order rates and a growing backlog across 
its main businesses.

   Caterpillar is also benefiting from the AI boom through increased orders for 
turbines used to power data centers, among other things.

   They're the latest companies to deliver even better profits for the latest 
quarter than investors expected, following strong results from Amazon, 
Microsoft and others. Coming into this week, companies in the S&P 500 index 
were on track to deliver growth of nearly 50% in earnings per share for the 
spring from a year earlier, according to FactSet.

   That would be the biggest such jump since 2021, when the economy was roaring 
back to life after cratering in the COVID-19 pandemic. With corporate profits 
up so much, when stock prices are still roughly where they were two months ago, 
stocks don't look as expensive as they did before, according to Phil Segner, a 
co-portfolio manager at the Leuthold Group.

   Also helping stocks on Tuesday was another drop for oil prices.

   Brent crude, the international standard, sank 5.3% to $79.36 per barrel as 
hope once again took over from fear in the oil market. It had swung sharply 
between $72 and $102 through July on uncertainty about when the war with Iran 
would allow oil tankers to freely exit the Persian Gulf again to deliver crude 
around the world.

   It's jerked up and down many times as uncertainty built, receded and then 
built again, not only week to week but also hour to hour. Analysts warn more 
swings could be ahead, but the latest drop in oil prices nevertheless helped 
ease Wall Street's worries about inflation. That pulled down yields in the bond 
market, which in turn relaxed pressure on the overall economy and on prices for 
stocks and other investments.

   The yield on the 10-year Treasury fell to 4.62% from 4.70% Monday and from 
4.75% at the end of last week. That's a notable move for the bond market, 
though it remains well above its 3.97% level from before the war with Iran.

   Higher yields make it more expensive for all kinds of Americans to borrow 
money, from homebuyers looking for a mortgage to big companies looking to build 
AI data centers.

   Reports on the U.S. economy, meanwhile, showed it remains resilient even 
though inflation remains worse than anyone would like. One said U.S. employers 
were advertising nearly 7.4 million job openings at the end of June, a slight 
slowdown from May's level but close to economists' expectations.

   In stock markets abroad, indexes rose modestly across much of Europe and 
Asia.

   South Korea's Kospi had a more significant move and climbed 1.6%. Seoul has 
seen some of the world's sharpest swings because two companies swept up in AI 
mania dominate its market, Samsung Electronics and SK Hynix. The Kospi had 
dropped 5.1% and soared 17.9% in the prior two days.

   Stocks of computer chip companies also strengthened on Wall Street, where 
gains of 2.6% for Nvidia, 6.6% for Broadcom and 7.6% for Micron Technology were 
some of the strongest forces lifting the S&P 500.

   They more than offset a drop for Chipotle Mexican Group, which fell 9.7% on 
fears that future profits could be hurt after the chain removed jalapeos from 
some of its restaurants following a salmonella outbreak. Chipotle said that 
Minnesota health officials have no ongoing concerns with it.

   All told, the S&P 500 rallied 136.02 points to 7,736.52. The Dow Jones 
Industrial Average jumped 907.47 to 54,085.88, and the Nasdaq composite climbed 
671.10 to 26,584.99.

   ___

   AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.

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