US stocks advance as earnings, guidance beat forecasts

Wall Street gained ground on Tuesday as a spate of solid corporate earnings and upbeat forecasts stoked investor risk appetite and prompted a broad rally.

All three major US stock indexes were higher, with interest rate sensitive megacaps providing much of the upside lift as benchmark Treasury yields held steady, comfortably below their recent spike to 5%.

"We're in the midst of earnings season and there's a lot of focus on the large cap tech names on tap, a couple of which report after the bell," said Bill Merz, head of Capital Market Research at US Bank Wealth Management in Minneapolis. "We had a pullback on 10-year Treasury yields yesterday and there hasn't been a bounce-back today, and that's added to the optimism."

Third quarter earnings season has shifted into high gear, and this week nearly a third of the companies in the S&P 500 are expected to post results.

Of the 118 that have reported so far, 81% have beaten analysts' expectations, according to LSEG.

Verizon VZ.N surged 8.6% after raising its annual free cash flow forecast, while General Electric GE.N rose 6.8% after the conglomerate lifted its full-year profit forecast.

Coca-Cola KO.Nhiked its annual sales outlook, sending its stock up 2.9%, while 3M MMM.N rose 4.5% on the heels of its upbeat quarterly report.

Aerospace firm RTX RTX.N jumped 7.1% after its results topped expectations.

On the economics front, business activity in the US has ticked higher this month, according to S&P Global's advance "flash" purchasing managers' indexes.

On Thursday, the Commerce Department is due to release its first take on third quarter GDP, which is seen showing a robust acceleration to 4.3% from 2.1% in the second quarter.

On Friday, the Commerce Department is expected to follow with its closely watched Personal Consumption Expenditures (PCE) report, which analysts expect will provide further evidence that inflation is slowly cooling down toward the Federal Reserve's average annual 2% target rate.

"The question is, can the Fed thread the needle - can they get inflation to moderate to an acceptable level before things deteriorate significantly for the US consumer?" Merz said.

If that happens, Merz adds, the odds increase that the US economy will avoid a recession.

At 2:19PM ET, the Dow Jones Industrial Average .DJI rose 157.24 points, or 0.48%, to 33,093.65, the S&P 500 .SPX gained 18.22 points, or 0.43%, to 4,235.26 and the Nasdaq Composite .IXIC added 63.55 points, or 0.49%, to 13,081.88.

Of the 11 major sectors in the S&P 500, utilities .SPLRCU were enjoying the largest gain, while energy .SPNY was the sole loser, weighed down by softening crude prices CLc1.

High-profile companies expected to report third quarter results after the bell include Alphabet Inc, GOOGL.O, Microsoft Corp MSFT.O and Ford Motor Co F.N

Advancing issues outnumbered declining ones on the NYSE by a 2.15-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and 35 new lows; the Nasdaq Composite recorded 12 new highs and 281 new lows.