By Karen Langley and Anna Isaac 

U.S. stocks climbed Tuesday as investors cheered strong results from banks and health-care companies at the unofficial start of the third-quarter earnings season.

The outlook for profits had dimmed in recent months, with Wall Street analysts lowering earnings expectations for all 11 sectors of the S&P 500.

But UnitedHealth Group, Johnson & Johnson and JPMorgan Chase -- all components of the Dow Jones Industrial Average -- kicked off the reporting period with a shot of optimism. Goldman Sachs Group shares also climbed, despite a mixed report.

Those four stocks contributed nearly 165 points to the blue-chip index, which climbed 237.44 points, or 0.9%, to 27024.80. The S&P 500 rose 29.53 points, or 1%, to 2995.68, led by the health-care sector. The gains put both indexes less than 1.3% from July's all-time highs.

The Nasdaq Composite added 100.06 points, or 1.2%, to 8148.71.

All three major indexes are now up for October after a shaky start to the month.

The bank earnings contained evidence of the continuing resilience of the consumer, said Elliott Savage, co-portfolio manager of YCG Enhanced Fund.

"Today's data points slightly reduce the concern of an impending recession, because of the strength of the consumer," he said.

As earnings season continues, investors will parse the reports for signs of how U.S. business is holding up amid slowing global growth and the long-simmering trade dispute with China. Among the companies scheduled to report Wednesday are Bank of America, Netflix, CSX and Alcoa.

Overall, analysts expect the companies in the S&P 500 to report a 4.7% decline in profits for the quarter, according to FactSet. That would mark the third consecutive quarter of lower earnings -- the longest such streak since a period of softening global growth from late 2015 to early 2016.

Shares of UnitedHealth Group rose $18, or 8.2%, to $238.59 after the company posted third-quarter results that beat expectations and raised its profit guidance for the year. That spurred a rally in shares of other health insurers that had been battered by political headwinds this year ahead of the 2020 election. Anthem, Cigna and Centene climbed.

Also in the health-care space, Johnson & Johnson shares added $2.12, or 1.6%, to $132.84 after the company raised its financial forecast for the rest of 2019, despite grappling with a heavy case load of litigation.

Elsewhere, JPMorgan Chase, the nation's largest bank by assets, rose $3.51, or 3%, to $119.96 after the bank beat profit expectations. The company continued to see strength in both its consumer and investment-bank businesses. Net interest income rose, despite the Federal Reserve cutting interest rates in recent months.

"That's a sigh of relief after a lot of consternation going into the earnings season around banks in general," said Andy Braun, a portfolio manager at Pax World Funds.

Goldman shares added 64 cents, or 0.3%, to $206.46, despite reporting a lower profit that was dinged by its Wall Street businesses.

As investors continue to look for fresh signs about the future course of interest rates, Federal Reserve Bank of St. Louis President James Bullard said Tuesday in London that the U.S. Federal Reserve could cut its key interest rate again to cushion the economy against threats to growth. The U.S. economy is slowing and faces a number of "downside risks" that could require a further "insurance" move from policy makers, Mr. Bullard said.

The yield on the U.S. 10-year Treasury rose to 1.773%, from 1.748% Friday. The bond market was closed Monday for Columbus Day.

Meanwhile, the British pound rallied Tuesday on speculation that the U.K. and European Union may be close to finishing a draft Brexit agreement. The pound climbed 1.4% against the U.S. dollar, reaching its highest in about four months and putting it on course to wipe out losses from earlier this year.

In Asia, Chinese stocks fell as fresh economic data added to concerns about weaker growth prospects and the government's ability to strike a trade agreement with the U.S.

The Shanghai Composite gauge dropped 0.6% as official data showed inflation reached a near six-year high last month, driven by rising pork prices. This comes amid signs of slowing growth and trade tensions for the world's second-largest economy.

"China's not going to change its core economic policy to placate Washington, be it on intellectual property or similar," said Rory Green, an economist at investment research firm T.S. Lombard. "They are accepting slower growth, they are not going to do a big credit stimulus as we've seen in the past; markets are slowly realizing that."

Write to Anna Isaac at anna.isaac@wsj.com

(END) Dow Jones Newswires

October 15, 2019 17:02 ET (21:02 GMT)