Shares of heavy construction and engineering companies rose Tuesday after Fluor Corp. and McDermott International Inc. posted first-quarter earnings that impressed investors.
The Dow Jones U.S. Heavy Construction Index gained 36.17 points, or 5.7 percent, to 674.42 by midday.
Shares of Fluor shot to an all-time high of $190.25 on Tuesday after the Irving, Texas-based contractor and engineering firm said late Monday its first-quarter profit surged 63 percent, beating analyst estimates.
The company also said its backlog soared 33 percent to $31.5 billion and it won an array of new projects, particularly in the energy sector.
In a note to investors, Lazard Capital Markets analyst Graham Mattison upgraded Fluor to "Buy" from "Hold."
"We forecast solid revenue and earnings growth as Fluor translates its massive backlog into bottom-line performance," Mattison wrote.
In midday trading, shares of Fluor were up $22.89, or 13.7 percent, at $189.25.
Meanwhile, shares of McDermott International rose sharply after the company reported first-quarter results in line with Wall Street estimates. Results were hurt by weather-related inactivity at its offshore oil and gas segment.
Calyon Securities analyst Mark Urness said the company's weather-related downturn was a "one-time event" that would give way to stronger earnings in the future. He reiterated his "Buy" rating and $67 price target in a note to investors.
Shares of McDermott gained $3.30, or 6.1 percent, to $57.25.
Other companies in the sector traded higher, as well. Jacobs Engineering Group Inc. climbed $3.15, or 3.5 percent, to $92.07.
Shaw Group Inc. rose $1.98, or 4.1 percent, to $50.75.
Emcor Group Inc. advanced 31 cents to $26.65.
Chicago Bridge and Iron gained $1.78, or 4.3 percent, to $42.96.
Perini Corp. climbed 68 cents to $42.15.
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