Stocks extended their upward momentum from the previous sessions, closing mostly higher on Tuesday. The Dow outpaced other indices by reaching a new record high.
The Dow surged 742.76 points, or 1.9%, closing at 40,954.48. Similarly, the S&P 500 advanced 35.98 points, or 0.6%, to set a new record at 5,667.20, while the Nasdaq climbed 36.77 points or 0.2% to 18,509.34.
Wall Street's strength was partly driven by positive earnings reports. Notably, Dow component UnitedHealth (UNH) saw significant gains after surpassing second-quarter earnings expectations. Bank of America (BAC) also experienced a notable uptick following better-than-anticipated earnings. Morgan Stanley (MS) rebounded from early losses to end positively, driven by stronger-than-expected second-quarter results.
Investors responded favorably to the latest U.S. economic data, including a report from the Commerce Department indicating that U.S. retail sales remained unchanged in June. The report shows that retail sales held steady after an upwardly revised 0.3% increase in May. This was in line with economists' predictions of no change following the initially reported 0.1% uptick in May.
Excluding a significant drop in sales of motor vehicles and parts, retail sales increased by 0.4% in June after a modest 0.1% rise in May. Analysts had anticipated a 0.1% increase in ex-auto sales.
"Investor sentiment seems bolstered by the strong retail sales data, alongside a growing belief that monetary policy might ease post-summer,” remarked Dan Coatsworth, investment analyst at AJ Bell.
The Labor Department's report on import prices revealed they were flat in June, contrary to expectations of a 0.2% rise. Previously, import prices had dipped by a revised 0.2% in May. Export prices, however, fell by 0.5% in June, following a revised 0.7% decrease in May.
Sector News
Housing stocks saw substantial gains, with the Philadelphia Housing Sector Index spiking by 5.3% to a record high. This sector's boost came despite the National Association of Home Builders reporting a surprising drop in homebuilder confidence for July.
Gold stocks also experienced significant strength, driven by a sharp rise in gold prices, as the NYSE Arca Gold Bugs Index surged 3.4%, reaching its highest point in more than two years.
The airline sector saw considerable gains as well, with the NYSE Arca Airline Index increasing by 3.3%. Banking, biotechnology, and telecom stocks also performed strongly, aligning with the broader upward trend across major sectors.
Other Markets
Internationally, the Asia-Pacific region showed a mixed performance. Japan's Nikkei 225 Index rose by 0.2%, and China's Shanghai Composite Index inched up by 0.1%, while Hong Kong's Hang Seng Index dropped by 1.6%.
European markets declined, with the French CAC 40 Index falling by 0.7%, the German DAX Index by 0.4%, and the U.K.'s FTSE 100 Index dipping by 0.2%.
In the bond market, treasuries rebounded from the previous session's pullback. The yield on the benchmark ten-year note, which moves inversely to its price, dropped 6.2 basis points to 4.167%.
Looking Ahead
On Wednesday, trading may be influenced by reports on industrial production and housing starts, along with the Federal Reserve's Beige Book.
