Stocks climbed as a slew of solid corporate profits took the focus off concerns about the economic impact of coronavirus flareups around the globe. The dollar fell, while Bitcoin surged.

After a bruising selloff driven by worries over a peak in earnings and a slowdown in growth momentum, the S&P 500 notched its biggest back-to-back rally in two months. Once again, the advance was led by companies that stand to benefit the most from a reopening of the economy, such as commodity, financial and industrial shares. A gauge of small caps gained almost 2 per cent.

Bitcoin soared -- trading near US$32,000 -- after some prominent voices discussed prospects for the digital currency at the “B Word” conference, hosted by the Crypto Council for Innovation. Elon Musk, the billionaire head of Tesla Inc., said his space exploration company SpaceX owns the digital token. Ark Investment Management’s Cathie Wood urged firms to consider the “explosive” Bitcoin growth.

Giants Verizon Communications Inc. and Coca-Cola Co. rose after better-than-estimated quarterly results. Despite investor jitters on whether COVID-19 infections will upend a travel resurgence, United Airlines Holdings Inc. predicted profits ahead. Meantime, Netflix Inc. retreated on a disappointing subscriber forecast.

Traders are rewarding companies with better-than-expected results amid bets that the second quarter’s expected 70 per cent earnings growth will mark the pinnacle of this expansion cycle. More than 85 per cent of the S&P 500 firms reporting results so far have beaten analysts predictions, according to data compiled by Bloomberg. For Michael Purves, chief executive officer at Tallbacken Capital Advisors, earnings forecasts for the benchmark have surged because of a “huge explosion” in profits at economically sensitive firms.

“We may be getting back to a point where earnings matter a little bit more than they had,” said Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors. “Company guidance is going to be very important as well.”

Strategists from JPMorgan Chase & Co. and UBS Global Wealth Management urged clients to buy cyclicals as the economic recovery is just getting started.

The “reopening of the economy is not an event but rather a process, which in our opinion is still not priced-in, and especially not now given recent market moves,” wrote JPMorgan strategists led by Dubravko Lakos-Bujas. “This does not signal the beginning of a down cycle.”

Other corporate highlights:

• Johnson & Johnson raised its annual adjusted earnings and revenue forecast as quarterly sales rebounded strongly from a year ago.
• Chipotle Mexican Grill Inc. climbed after better-than-expected results and sales guidance.
• Harley-Davidson Inc. tumbled after the motorcycle maker reported sales that slumped in every region but its home market.

Some key events to watch this week:

• European Central Bank rate decision Thursday
• Bank Indonesia rate decision Thursday
• U.S. existing home sales Thursday
• The Tokyo Summer Olympics begin Friday

Here are some of the main market moves:

Stocks

• The S&P 500 rose 0.8 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 0.8 per cent
• The Dow Jones Industrial Average rose 0.8 per cent
• The MSCI World index rose 1 per cent
• The Russell 2000 Index rose 1.8 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 per cent
• The euro rose 0.2 per cent to US$1.1800
• The British pound rose 0.7 per cent to US$1.3718
• The Japanese yen fell 0.4 per cent to 110.27 per dollar

Bonds

• The yield on 10-year Treasuries advanced seven basis points to 1.29 per cent
• Germany’s 10-year yield advanced two basis points to -0.39 per cent
• Britain’s 10-year yield advanced four basis points to 0.60 per cent

Commodities

• West Texas Intermediate crude rose 4.4 per cent to US$70.19 a barrel
• Gold futures fell 0.4 per cent to US$1,804.40 an ounce