By Lewis Krauskopf, Devik Jain and Shashank Nayar
(Reuters) - Wall Street's main indexes rose modestly on Tuesday to intraday record highs as a strong earnings season continued to lift sentiment for equities, while investors were looking ahead to a critical Federal Reserve meeting.
Pfizer (NYSE:PFE) shares rose 5.2% after the drugmaker said it expected 2021 sales of the COVID-19 vaccine it developed with German partner BioNTech to reach $36 billion. The stock helped push the S&P 500 healthcare sector up 0.9%.
Overall, third-quarter earnings have come in better-than-expected for U.S. companies as the economy continues to bounce back from the coronavirus pandemic. With some 320 companies having reported so far, S&P 500 earnings are expected to have climbed 40.2% in the third quarter from a year ago, according to Refinitiv IBES.
"From a fundamental perspective, there is a strong underpinning for the performance of the broad equity market complex," said Bill Northey, senior investment director at U.S. Bank Wealth Management.
"The next several days and weeks will include significant developments on the policy front, and we are watching that very closely because as we transition out of the earnings reporting season many of the macro factors will start to take center stage again.”
The Dow Jones Industrial Average rose 141.12 points, or 0.39%, to 36,054.96, the S&P 500 gained 15.37 points, or 0.33%, to 4,629.04 and the Nasdaq Composite added 18.53 points, or 0.12%, to 15,614.45.
The economically sensitive Dow Jones Transportation Average soared 5.9% to hit an all-time intraday high, lifted by a 95% surge in shares of car-rental firm Avis Budget after it reported earnings.
Among S&P 500 sectors, materials rose about 1% and real estate added 0.9%. Consumer discretionary fell 1%, dragged lower by a 4% drop in Tesla (NASDAQ:TSLA) shares.
The Fed on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the pandemic. Investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.
"Today the economy is in a much better footing and with inflation at current levels we don't need such amount of accommodative policies and a taper in turn will send a signal to the market that the economy is better off," said Michael Sheldon, chief investment officer at RDM Financial Group at Hightower in Westport, Connecticut.
In company news, shares of Under Armour Inc (NYSE:UAA) jumped 17% after the athletic apparel maker raised its annual forecasts.
Declining issues outnumbered advancing ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored decliners.
The S&P 500 posted 55 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 164 new highs and 44 new lows.