Wall St hovers near record highs, S&P 500 set for strong August
Wall Street advanced in a late-summer, light volume session on Tuesday as an absence of negative catalysts kept risk appetite alive ahead of the much-anticipated Jackson Hole Symposium.
All three major U.S. stock indexes were higher, with the S&P 500 and the Nasdaq on course to notch record closing highs.
Tech and tech-adjacent megacaps were once again doing the heavy lifting, but economically sensitive cyclicals and smallcaps were outperforming the broader market.
“When you look at slower periods in the market - and we’re in that pre-Labor Day, last gasp of summer - it’s not unusual for markets to have an upward rise,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
“Spurring that is some of the news that’s come out on the (Delta) variant front, the full approval of the vaccine,” Carlson added.
The Food and Drug Administration’s full approval of the Pfizer-BioNTech COVID-19 vaccine on Monday fueled optimism over economic recovery which spilled into Tuesday’s session.
Travel and leisure sectors, associated with economic re-engagement, were enjoying a healthy rally. The S&P 1500 Airline and Hotel/Restaurant/Leisure indexes were up 4.0% and 2.0%, respectively.Nine of the 11 major S&P sectors fell, with consumer discretionary stocks down 2.7%, followed by industry and materials down 1.4%.
“In a market where people are looking for opportunity, they’re finding it again in these economically sensitive stocks,” Carlson said.
Recent economic indicators suggest the recovery from the most abrupt recession in U.S. history is headed in the right direction, but not to the extent that is likely to prompt the U.S. Federal Reserve to tighten its dovish monetary policy.
Fed Chair Jerome Powell is due to meet with other world bank leaders when the Jackson Hole Symposium convenes later this week, and his remarks will be closely parsed for any clues regarding the Fed’s tapering of asset purchases and hiking key interest rates.
The Dow Jones Industrial Average rose 82.17 points, or 0.23%, to 35,417.88, the S&P 500 gained 10.85 points, or 0.24%, to 4,490.38 and the Nasdaq Composite added 74.57 points, or 0.5%, to 15,017.23.
Of the 11 major sectors in the S&P 500, energy was the top gainer, boosted by the continued rally in crude prices. [O/R]
Best Buy Co Inc jumped 9.9% after the electronics retailer beat analyst earnings expectations and raised its full year sales forecast.
U.S.-listed shares of China-based e-commerce platform Pinduoduo Inc surged 19.5% after reporting its first ever quarterly profit.
JD.com gained 14.0% in the wake of the Chinese online retailer’s remarks on Monday that it does not expect any business impact from a wave of regulations hitting the industry at home.
Other shares of Chinese companies listed on U.S. exchanges were bouncing back as well, with the Invesco Golden Dragon ETF jumping 7.4%.
Cybersecurity firm Palo Alto Networks Inc advanced 19.7% as brokerages raised their price targets following its full-year forecast beat.
Advancing issues outnumbered declining ones on the NYSE by a 2.34-to-1 ratio; on Nasdaq, a 1.89-to-1 ratio favored advancers.
The S&P 500 posted 26 new 52-week highs and one new low; the Nasdaq Composite recorded 83 new highs and 26 new lows.