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U.S. stocks closed sharply higher on Tuesday, with the Dow hitting an all-time closing high and recording its best day in more than a year after stronger-than-expected retail sales data indicated that the Federal Reserve is gearing up for rate cuts while avoiding recession. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 1.9% or 742.76 points, to finish at 40,954.48 points, hitting an all-time high. This was the blue-chip index’s highest daily percentage gain since June 2023 and the biggest daily point gain since November 2023.
The index also registered its fifth consecutive session of gains and its 21st new closing high.
The S&P 500 rose 0.6% or 35.98 points, to end at 5,667.20 points. Materials, industrial and consumer discretionary stocks were the best performers.
The Materials Select Sector SPDR (XLB) rose 1.9%. The Industrials Select Sector SPDR (XLI) added 2.5%, while the Consumer Discretionary Select Sector SPDR (XLY) gained 1.8%. However, tech stocks suffered. The Technology Select Sector SPDR (XLK) lost 0.3% Ten of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq gained 0.2% or 36.77 points to close at 18,509.34 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.53% to 13.19. Advancers outnumbered decliners on the NYSE by a 4.58-to-1 ratio. On the Nasdaq, a 3.50-to-1 ratio favored advancing issues. A total of 11.83 billion shares were traded on Tuesday, higher than the last 20-session average of 11.68 billion.
Dow Hits All-Time High on Rate Cut Hopes
Positive economic data released over the past week has raised hopes that the Federal Reserve could start its easing cycle in September. This has been fueling the Wall Street rally over the past few sessions.
The economically sensitive small-caps extending their rally into Tuesday. The rotation from megacap growth stocks to small-cap and cyclical stocks started last week following the release of the consumer price index data that showed the monthly inflation fell for the first time since May 2020.
The reading was an indication that inflation is nearing the Federal Reserve’s 2% target which could take the central bank a step closer to cutting interest rates and at the same time prevent the economy from slipping into a recession.
On Tuesday, the rotation trade added fuel to the Russel 2000 rally that started last week. The small-cap index jumped 3.5% to close close at its highest level since January 2022. The Russel 200 has now climbed 11.5% in its past five sessions, recording its biggest five-day gain since April 2020.
Investors are also closely watching the earnings season, which is steadily gathering pace. On Tuesday, among major companies UnitedHealth Group ((UNH - Free Report) ) reported its quarterly results. Shares of UnitedHealth Group jumped 6.5% after the insurer reported second-quarter 2024 earnings of $6.80 per share, beating the Zacks Consensus Estimate of $6.65 per share.
Stronger-than-Expected Retail Sales Data
The Commerce Department said on Tuesday that retail sales data came in stronger than expected. June retail sales came in unchanged totaling $704.3 billion, higher than the consensus estimate of a decline of 0.3% after increasing 0.3% in May.
The retail sales data further reassured investors’ belief that the Federal Reserve has likely managed a soft landing for the economy so far. Excluding autos, retail sales rose 0.4%, higher than economists' expectations of a rise of 0.1%.
Economic Data
In other economic data released on Tuesday, U.S. import prices remained unchanged in June after declining 0.2% in May. Year-over-year import prices increased 1.6%. Export prices fell 0.5% in June after falling 0.7% in May. Year over year, export prices increased 0.7% after rising 0.5% in May.
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Stock Market News for Jul 17, 2024
U.S. stocks closed sharply higher on Tuesday, with the Dow hitting an all-time closing high and recording its best day in more than a year after stronger-than-expected retail sales data indicated that the Federal Reserve is gearing up for rate cuts while avoiding recession. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 1.9% or 742.76 points, to finish at 40,954.48 points, hitting an all-time high. This was the blue-chip index’s highest daily percentage gain since June 2023 and the biggest daily point gain since November 2023.
The index also registered its fifth consecutive session of gains and its 21st new closing high.
The S&P 500 rose 0.6% or 35.98 points, to end at 5,667.20 points. Materials, industrial and consumer discretionary stocks were the best performers.
The Materials Select Sector SPDR (XLB) rose 1.9%. The Industrials Select Sector SPDR (XLI) added 2.5%, while the Consumer Discretionary Select Sector SPDR (XLY) gained 1.8%. However, tech stocks suffered. The Technology Select Sector SPDR (XLK) lost 0.3% Ten of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq gained 0.2% or 36.77 points to close at 18,509.34 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.53% to 13.19. Advancers outnumbered decliners on the NYSE by a 4.58-to-1 ratio. On the Nasdaq, a 3.50-to-1 ratio favored advancing issues. A total of 11.83 billion shares were traded on Tuesday, higher than the last 20-session average of 11.68 billion.
Dow Hits All-Time High on Rate Cut Hopes
Positive economic data released over the past week has raised hopes that the Federal Reserve could start its easing cycle in September. This has been fueling the Wall Street rally over the past few sessions.
The positive sentiment continued into Tuesday, with the Dow finishing at a new all-time closing high. Shares of Caterpillar Inc. ((CAT - Free Report) ) jumped 4.3%. Caterpillar has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The economically sensitive small-caps extending their rally into Tuesday. The rotation from megacap growth stocks to small-cap and cyclical stocks started last week following the release of the consumer price index data that showed the monthly inflation fell for the first time since May 2020.
The reading was an indication that inflation is nearing the Federal Reserve’s 2% target which could take the central bank a step closer to cutting interest rates and at the same time prevent the economy from slipping into a recession.
On Tuesday, the rotation trade added fuel to the Russel 2000 rally that started last week. The small-cap index jumped 3.5% to close close at its highest level since January 2022. The Russel 200 has now climbed 11.5% in its past five sessions, recording its biggest five-day gain since April 2020.
Investors are also closely watching the earnings season, which is steadily gathering pace. On Tuesday, among major companies UnitedHealth Group ((UNH - Free Report) ) reported its quarterly results. Shares of UnitedHealth Group jumped 6.5% after the insurer reported second-quarter 2024 earnings of $6.80 per share, beating the Zacks Consensus Estimate of $6.65 per share.
Stronger-than-Expected Retail Sales Data
The Commerce Department said on Tuesday that retail sales data came in stronger than expected. June retail sales came in unchanged totaling $704.3 billion, higher than the consensus estimate of a decline of 0.3% after increasing 0.3% in May.
The retail sales data further reassured investors’ belief that the Federal Reserve has likely managed a soft landing for the economy so far. Excluding autos, retail sales rose 0.4%, higher than economists' expectations of a rise of 0.1%.
Economic Data
In other economic data released on Tuesday, U.S. import prices remained unchanged in June after declining 0.2% in May. Year-over-year import prices increased 1.6%. Export prices fell 0.5% in June after falling 0.7% in May. Year over year, export prices increased 0.7% after rising 0.5% in May.