U.S. stocks closed higher on Tuesday following better-than-expected earnings reports from a slew of major retailers and impressive economic data. This helped them somewhat shed worries over rising inflation. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) climbed 0.2% or 54.77 points to end at 36,142.22 points.
The S&P 500 rose 0.4% or 18.10 points to close at 4,700.90 points. Consumer discretionary and technology stocks were the biggest gainers. The Consumer Discretionary Select Sector SPDR (XLY) increased 1.6%, while the Technology Select Sector SPDR (XLK) gained 1.1%. However, six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq increased 0.8% or 120.01 points to finish at 15,973.86 points. Shares of Microsoft Corporation MSFT and Apple, Inc. AAPL gained 1% and 0.7%, respectively. Apple and Microsoft each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 0.73% to 16.37. A total of 10.53 billion shares were traded on Tuesday, lower than the last 20-session average of 11.02 billion. Decliners outnumbered advancers on the NYSE by a 1.22-to-1 ratio. On Nasdaq, a 1.14 -to-1 ratio favored declining issues.
Investors Shed Inflation Worries
Inflation worries have been denting investors’ confidence for quite some time not. This saw all the three major indexes getting stuck in a rut after hitting record highs last month. However, a solid earning season that has seen companies reporting impressive results have been somewhat lifting investors’ sentiment.
On Tuesday, a slew of big-box retailers reported their quarterly results. The Home Depot, Inc. HD was one of the biggest gainers after it reported solid quarterly results. Home Depot reported third-quarter fiscal 2021 earnings of $3.92, beating the Zacks Consensus Estimate of $3.41 per share. Shares of Home Depot rallied 5.7%.
Besides, shares of other retailers like Lowe’s Companies, Inc. LOW and Target Corporation TGT increased 4.2% and 1.2%, respectively. Both the companies are scheduled to report their quarterly results on Wednesday.
Also, technology stocks were big gainers. Investors also regained some lost confidence on Wednesday following the release of a slew of economic data that came in better than expected.
A major reason behind Tuesday’s rebound was the impressive economic data. The Census Bureau said, retail sales jumped 1.7% in October, beating analysts’ expectations of 1.5%. This follows a 0.8% rise in September. Excluding autos, sales grew 1.4% in October.
In other economic report released on Wednesday, the Fed said that industrial production, which includes factory, mining and utility output, jumped an impressive 1.6% in October on a month-over-month basis. This also surpassed expectations of a 0.8% rise.
In a separate report, the National Association of Home Builders reported that homebuilder confidence rose 3 points to a reading of 83 in November, hitting a six-month high.
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