Market Snapshot: S&P 500 hits record as Wall Street extends summer rally

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U.S. stocks rose Tuesday, with the S&P 500 notching an intraday record, as the market remained on track to extend gains for a fourth straight session. Tuesday’s advance comes as the U.S. equity run is a day away from becoming the longest bull market in history.

What are the major benchmarks doing

The Dow Jones Industrial Average DJIA, +0.38% rose 107 points, or 0.4%, to 25,867. The S&P 500 index  SPX, +0.34%  advanced 11 points, or 0.4%, to 2,868 after touching a high of 2,873.23. The large-cap index is also inching toward the record close of 2,872.87 set on Jan. 26.

The Nasdaq Composite Index COMP, +0.55%  climbed 56 points, or 0.7%, to 7,877. The Nasdaq is about 0.5% below its record and the Dow is 3% under its own, but is very close to exiting a correction it has been mired in since February.

The Dow Jones Transportation Average DJT, +0.72%  gained 0.9% to 11,463, after carving out an intraday peak at 11,475.40, marking the transport gauge’s first high since Jan. 16, while the small-capitalization Russell 2000 index RUT, +1.28% rallied 1.3% to an intraday record of 1,722.29.

Don’t miss: Stocks may be finally about to break out of this trading range

What’s driving the market?

With the second-quarter earnings season essentially over and no economic data on tap, investors are turning their attention to news from the Federal Reserve. The minutes from the central bank’s latest meeting will be released on Wednesday, and on Friday, Fed Chairman Jerome Powell will give a speech at the Fed’s annual summer retreat in Jackson Hole.

Both the minutes and the speech will be scoured for any insight into what the Fed sees as potential problem spots for the economy. In particular, market participants will be looking to hear Powell’s thoughts on trade policy and whether the currency crisis in Turkey could spread to other emerging markets or regions—as well as for any clues into the Fed’s policy plan on interest rates.

Don’t miss: Here’s how Jackson Hole could impact the dollar, bonds and emerging markets

The speech could take on some political overtones this year, after President Donald Trump again criticized Powell and the Fed. Trump said he was “not thrilled” with the Fed chairman, who he had appointed to replace Janet Yellen, and that he expected “more help” from the central bank. Reuters reported that Trump said he would continue criticizing the Fed should it continue to raise short-term interest rates, which the central bank has indicated it will do at a steady clip.

This isn’t the first time Trump has called out the Fed for raising rates. When he did so in July, Powell stressed that the Fed operated independently of political considerations.

Separately, investors are continuing to monitor trade relations between the U.S. and its major trading partners, with talks between the U.S. and China set to resume on Wednesday. While market participants are optimistic that progress could be made in the talks—potentially averting a trade war, which most analysts said would be a massive headwind for global economic growth—few expect the issue to be resolved.

On Monday, Trump told Reuters that he has “no time frame” for ending the trade dispute, and that he didn’t “expect much” from the talks. His administration is also moving forward with tariffs that cover $200 billion in Chinese goods.

Meanwhile, the bull market in stocks on Wednesday is due to become the longest bull market on record, from the March 9, 2009 low of the financial crisis which many consider the birth date of the current bull.

Read: This bull market in U.S. stocks stands just a day away from the history books

What are market analysts saying?

“I think that this is optimism on at least some partial resolution of the trade negotiations as investors are expecting progress [on that front],” said Kate Warne, investment strategist at Edward Jones, referring to the market’s recent rise.

“If we reach new highs that’s great but I think it would be a reflection of the positive underlying fundamentals of very positive earnings growth and modest interest rates,” Warne said.

Kristina Hooper, chief global market strategist at Invesco, was quite pessimistic on a positive outcome from the U.S.-China talks, downplaying the possibility of China making too many concessions.

“I would argue that, contrary to conventional wisdom, China holds the upper hand in a trade dispute with the U.S. Its currency is decelerating, helping to compensate for the tariffs imposed on it by the U.S. Moreover, it has the ability to spend to compensate for any reduction in growth caused by the tariffs,” she said in a note.

What stocks are in focus?

Toll Brothers Inc. TOL, +13.65%  jumped 14% after it reported its third-quarter results and gave a full-year sales outlook.

Coty Inc. COTY, -5.89%  sank 7.3% after it reported fourth-quarter revenue that missed expectations, although its adjusted profits topped forecasts by a penny a share.

Medtronic PLC MDT, +6.01%  gained 5.5%. The medical device company posted first-quarter earnings and revenue that beat expectations. It also raised its organic full-year revenue outlook.

Kohl’s Corp. KSS, +0.57%  shares rose 1% after the retailer reported adjusted second-quarter earnings that beat expectations, along with revenue that was ahead of forecasts. It also raised its full-year adjusted profit view.

J.M. Smucker SJM, -5.83%  reported adjust first-quarter earnings that beat expectations but its shares fell 6.8%.

Shares of discount brokers slumped after a report that JPMorgan Chase & Co. JPM, +0.82% was taking aim with a plan to launch a new digital brokerage service that comes with free trades. TD Ameritrade Holding Corp.’s stock AMTD, -7.43%  tumbled 7.3%, Charles Schwab Corp. SCHW, -2.33%  shed 2.3% and E-Trade Financial Corp.’s stock ETFC, -4.05%  slid 4.2%. J.P. Morgan’s stock, meanwhile, gained 1%.

After the market closes, Urban Outfitters Inc. URBN, -0.57% and Red Robin Gourmet Burgers Inc. RRGB, +1.13%  are expected to report.

What are other markets doing?

European stocks ended mostly higher with the exception of the U.K.’s FTSE UKX, -0.34%  and Asian markets all rose except for Australian stocks.

Oil futures CLU8, +1.34%  saw a fourth straight day of gains, while gold GCZ8, +0.51%  settled higher and the U.S. dollar DXY, -0.56%  slid 0.8%.

—Ryan Vlastelica contributed to this report

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