(Updates with U.S. trading; changes byline, dateline; previous LONDON)
* Dow opens at record high, more earnings reported
* U.S. Treasury yields higher
* NZ$ falls to 5-month lows on incoming govt’s policies
* Japan’s Nikkei extends 16-day winning streak
By Stephanie Kelly
NEW YORK, Oct 24 (Reuters) - The Dow Jones Industrial Average opened at a record high on Tuesday after a surge in shares of Caterpillar Inc, while U.S. 10-year Treasury yields hit a more than five-month peak.
The world’s largest construction and mining equipment maker, Caterpillar, beat third-quarter profit and sales estimates and raised its full-year forecasts. The Peoria, Illinois company expects revenue in its construction business to surge about 20 percent and its mining business to jump 30 percent. The company’s stock was up 4.6 percent.
3M, another Dow component, which makes products such as autoparts and office supplies, reported upbeat results as well. Its stock was up 6.9 percent.
Corporate earnings have gotten off to a strong start, with 73.2 percent of the 97 S&P companies beating profit expectations as of Monday versus a 72-percent beat rate over the past four quarters.
The Dow Jones Industrial Average rose 186.84 points, or 0.8 percent, to 23,460.8, the S&P 500 gained 3.6 points, or 0.14 percent, to 2,568.58 and the Nasdaq Composite added 12.14 points, or 0.18 percent, to 6,598.97.
Benchmark 10-year U.S. Treasury notes were last down 9/32 in price to yield 2.4081 percent, from 2.375 percent late on Monday.
The 30-year U.S. Treasury bond were last down 21/32 in price to yield 2.9226 percent, from 2.89 percent late on Monday.
Higher treasury yields are a result of the Federal Reserve’s plan to reduce its bond portfolio as well as the expectation of a December interest rate hike, said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.
“The bond reduction program will affect the long end of the bond curve, so the longer-term yields, like the 5-years and 10-years, have been going up as a result of that,” he said.
U.S. Treasury yields tracked European government bond yields higher. German Bund yields hit two-week peaks. Strong business and bank lending surveys backed a growing view the European Central Bank will announce a reduction of its monthly bond purchases on Thursday.
The pan-European FTSEurofirst 300 index lost 0.23 percent and MSCI’s gauge of stocks across the globe hovered below all-time highs, gaining 0.03 percent.
Apple supplier and chipmaker AMS saw a 21.9 percent jump after it pointed to strong demand ahead of the iPhone X release. Strong profits from Spain’s Caixabank also lifted the IBEX 0.6 percent after its Catalonia-related underperformance.
Japan’s Nikkei had extended its 16-day winning streak to a 21-year peak overnight following the weekend election win for Prime Minister Shinzo Abe.
The New Zealand dollar hit a five-month low after the incoming Labour-led coalition government said it plans to review and reform the Central Bank Act to include employment, alongside inflation, as a dual target.
The dollar index rose 0.01 percent as the wait continued for President Donald Trump to name the next head of the U.S. central bank after he said on Monday a decision was “very, very close.” Hopes for the passage of a tax cut plan also buoyed the greenback.
Spot gold edged 0.2 percent lower to $1,278 an ounce, remaining near a two-week low.
U.S. crude rose 0.25 percent to $52.03 per barrel and Brent was last at $57.37, flat on the day.
Reporting by Stephanie Kelly; Additional reporting by Marc Jones in London, Sruthi Shankar in Bengaluru and Gertrude Chavez-Dreyfuss in New York; Editing by Daniel Bases and James Dalgleish