By MARLEY JAY
AP Markets Writer
NEW YORK (AP) - Construction and mining equipment maker Caterpillar and Post-it note maker 3M led a rally in industrial companies Tuesday after they made strong third-quarter reports. Other U.S. stocks finished the day with smaller gains.
Caterpillar and 3M both raised their forecasts for the rest of the year after they did better than analysts had expected, and their stocks jumped. Combined the two companies were responsible for almost all of the 167-point gain in the Dow Jones industrial average, which sent the 30-stock index to a record high. Bond yields and interest rates rose, which helped banks, and technology companies climbed as well. Investors applauded reports from McDonald's and General Motors while health care companies including drugmakers stumbled. Household goods makers also declined.
UBS analyst Steven Fisher said he thinks Caterpillar, as well as other companies that make construction and mining equipment, are benefiting from gains in metals and oil prices over the last year to year-and-a-half.
"There's now a catch-up to not only meet the demand but also replenish inventories," he said. That delayed reaction helped Caterpillar in the third quarter and he said investors have high expectations for other machinery makers.
The Standard & Poor's 500 index gained 4.15 points, or 0.2 percent, to 2,569.13. The Dow Jones industrial average jumped 167.80 points, or 0.7 percent, to 23,441.76. The Nasdaq composite climbed 11.60 points, or 0.2 percent, to 6,598.43. The Russell 2000 index of smaller-company stocks added 2.93 points, or 0.2 percent, to 1,500.42.
Caterpillar's revenue from construction equipment climbed, and the company said it's getting strong demand for oil and gas machinery in North America and construction equipment in China. Its stock gained $6.56, or 5 percent, to $138.24, and it's up 49 percent in 2017. 3M, best known for Post-it notes, said its industrial, electronics and energy and health care businesses all got stronger and it expects a larger annual profit. It added $13.10, or 5.9 percent, to $234.65.
Caterpillar and 3M are two of the biggest winners in the Dow average this year. The top gainer is aerospace company Boeing, which rose $3.68, or 1.4 percent, to $266, giving it a 71-percent jump since the start of the year.
Bond prices continued to fall. The yield on the 10-year Treasury note rose to 2.42 percent from 2.37 percent and reached its highest level in five months. That helped banks, as higher interest rates boost their profits on lending. Bank of America gained 52 cents, or 1.9 percent, to $27.68 and JPMorgan Chase rose $1.58, or 1.6 percent, to $100.92.
Technology companies recovered most of Monday's losses. Specialty glass maker Corning jumped $1.93, or 6.4 percent, to $31.94 after its third-quarter report surpassed what Wall Street expected. Oracle rose 67 cents, or 1.4 percent, to $49.98 and video game maker Activision Blizzard added $1.27, or 2.1 percent, to $62.73.
Appliance maker Whirlpool had a weak quarter as costs were high and the company struggled to integrate European businesses it's bought over the last few years. Whirlpool also slashed its profit forecast for the year and its stock sank $19.24, or 10.5 percent, to $163.26.
Meanwhile Whirlpool's more than century-old ties to department store Sears are ending. Sears says it is no longer selling Maytag appliances or other Whirlpool products at its stores. Whirlpool said it told Sears months ago that it would stop supplying branded products for the chain to sell because the companies couldn't agree on terms. Sears lost 57 cents, or 8.7 percent, to $5.99.
Health care companies took losses. Drugmaker Biogen fell $12.82, or 3.9 percent, to $315.73 as sales of its multiple sclerosis drugs Tecfidera and Tysabri disappointed analysts. Eli Lilly sank $2.01, or 2.3 percent, to $85.17. The company posted a solid third quarter, but said diabetes drug prices are still under pressure. Lilly also said it may sell its Elanco animal health unit. That business had been an important part of Lilly's strategy as important older drugs like Zyprexa and Cymbalta lost patent protection.
Drugmakers AbbVie and Celgene and health care products maker Johnson & Johnson also fell.
Benchmark U.S. crude gained 57 cents, or 1.1 percent, to $52.47 a barrel in New York. Brent crude, used to price international oils, climbed 96 cents, or 1.7 percent, to $58.33 a barrel in London.
Wholesale gasoline rose 4 cents to $1.72 a gallon. Heating oil added 3 cents to $1.82 a gallon. Natural gas slipped 2 cents to $2.97 per 1,000 cubic feet.
Gold fell $2.60 to $1,278.30 an ounce. Silver lost 11 cents to $16.97 an ounce. Copper gained 1 cent to $3.20 a pound.
The dollar edged down to 113.58 yen from 113.73 yen. The euro rose to $1.1788 from $1.1738.
Germany's DAX rose 0.1 percent and the French CAC-40 gained 0.1 percent. The FTSE 100 in London finish little changed. Tokyo's Nikkei 225 rose for the 16th day in a row, which extended a post-World War II record. The index added 0.5 percent. The Hang Seng in Hong Kong lost 0.5 percent and Seoul's Kospi was unchanged.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay
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