Stocks were on a warpath on Tuesday, with all indices posting sizeable gains and the S&P 500 inching dangerously back within reach of its last all-time high in May.
The Dow Jones Industrial Average closed up 0.50 percent to 15,300.34 points, while the NASDAQ ended the day at 3,504.26 points, up 0.56 percent, and the S&P 500 closed up 0.72 percent to 1,652.31 points.
Aluminum manufacturer Alcoa’s (AA) earnings report, the release of which marks the unofficial but ceremonial beginning of the quarterly earnings season, kicked off the next few weeks of reporting on a promising note. The company managed to beat on both revenue and earnings-per-share, against headwinds in the form of dropping aluminum prices and slower growth out of China.
Confidence in equities appears to have returned, as indices headed into their fourth straight day of substantial gains by Tuesday’s close, and despite the fact that continued speculation about the Fed’s eventual tapering of asset-purchases has sparked a quick rise in 10-year Treasury note yields, currently at 2.63 percent. Investors were also undeterred by continued political unrest in Egypt, which on Monday resulted in the death of over 50 demonstrators, sending the price of crude up over three-quarters of a percent to $103.93 by the closing bell on fears of great region-wide instability.
Economic data points were scarce as investors held their breath ahead of Wednesday’s release of the minutes from the Federal Open Market Committee’s June meeting, to be followed by a press conference from Chairman Ben Bernanke. But the absence of market-moving data was compensated for by news of significant moves on the part of individual companies.
The Kroger Company (KR), operator of one of the US’s largest grocery store chains, dropped $2.5 billion to acquire the smaller Southeastern supermarket chain Harris Teeter, sending shares up 3 percent to a 52-week high of $37.32. Federal Express jumped 4.33 percent to $103.12 on speculation that billionaire hedge fund manager Bill Ackman was taking a significant stake in the company.
Home builder D.R. Horton (DHI) lead the S&P 500 on a gain of nearly 8 percent, on news that home foreclosures were significantly down from the prior year, and was followed by Netflix (NFLX), up nearly 6 percent after announcing an extended licensing deal with CBS (CBS).
On the Dow, construction equipment manufacturer Caterpillar Inc. (CAT) ended the day on top, on an advance of over 3 percent, followed by Cisco Systems Inc. (CSCO), up over 2 percent.
