Coca-Cola, IBM power Dow higher as Wall Street watches stimulus talks

Stocks opened with gains Tuesday as the details of the next coronavirus stimulus package came into view and silver linings emerged from another round of corporate earnings reports.

The Dow Jones Industrial Average rose roughly 300 points Tuesday, powered largely by rallies in shares of Coca-Cola and IBM. 

While Coca-Cola reported a 33 percent decline in profits in the second quarter of 2020, the company voiced optimism that demand would recover through the second half of the year. IBM’s second quarter earnings beat analyst expectations, pushing shares roughly 3 percent higher.

The S&P 500 index opened with a gain of roughly 0.5 percent, while the Nasdaq ticked higher by 0.25 percent before falling into a loss of 0.2 percent.

JJ Kinahan, chief market strategist at TD Ameritrade, also attributed Tuesday’s gains to a 750 billion Euro stimulus deal reached by the European Union. 

“This kind of spending seems likely to give suffering economies there a jolt even as investors wait to see if the U.S. can come up with a new fiscal package,” Kinahan wrote.

Investors are also closely watching Congress as lawmakers and Trump administration officials begin crafting another round of coronavirus response and economic rescue funding. 

Administration officials are set to brief Senate Republicans on Tuesday about the contours of the first offering from Republicans, which is likely to cost roughly $1 trillion. House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) are also set to meet Tuesday afternoon with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows.

There are still substantial disagreements between the White House and Senate GOP over funding for coronavirus testing and a payroll-tax cut favored by President Trump. Republicans and Democrats are also at odds over how to extend enhanced unemployment benefits, aid to struggling state and local governments and direct stimulus checks.