Stocks Opened Higher on Earnings

U.S. stock  were up at Tuesday’s start, after both Goldman Sachs Group Inc. (NYSE:GS) and Charles Schwab Corp. (NYSE:SCHW) beat analyst estimates for second-quarter earnings and those gains helped lift the whole S&P financial sector. The Dow Jones Industrial Average lately rose 35.80 points, or 0.28%, to 12,763.01. The S&P 500 index climbed 2.36 points, or 0.17%, to 1,356.00. The Nasdaq Composite advanced 4.25 points, or 0.15%, to  2,901.19.

Goldman posted a profit of $962 million, compared with a year-earlier profit of $1.09 billion. Earnings per share–reflecting the payment of preferred dividends–fell to $1.78 from $1.85 a year earlier. Analysts polled by Thomson Reuters expected $1.16 a share. Net revenue fell 9% to $6.63 billion. Analysts expected $6.28 billion in revenue.

Charles Schwab Corp. said Tuesday its second-quarter profit rose to $261 million, or 20 cents a share, from $238 million, or 20 cents a share, in the year-ago period. Wall Street analysts expected the brokerage firm to earn 18 cents a share on revenue of $1.23 billion.

Automatic cuts in federal spending will cost the economy more than 2 million jobs, from defense contracting to border security to education, if Congress fails to resolve the looming budget crisis, according to an analysis released Tuesday.

The Coca-Cola Co. says its net income slipped in the second quarter from a year ago, as rising costs for ingredients offset its expansion overseas. For the three months ended June 29, the company said it earned $2.79 billion, or $1.21 per share. That’s down from $2.8 billion, or $1.20 per share, in the year-ago period, when there were more outstanding shares.

J.P. Morgan Securities downgraded Deere & Co (DE) to “underweight” from “overweight,” saying it expects the world’s largest farm equipment maker to be hurt by the drought in the U.S. Midwest and declining farm yield.

The EU’s executive body, the European Commission, announced Tuesday that it was opening an investigation into whether Microsoft has kept the antitrust commitments it made in 2009, and warned that penalties for non-compliance would be “severe.”