Benchmarks closed in the green on Tuesday boosted by bullish economic data, especially an upbeat consumer confidence this month. The S&P 500 and the Nasdaq finished in record territory lifted by rally in tech stocks and defied concerns surrounding high stock valuations and spread of the delta variant of Covid-19 across the globe.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 9.02 points, or less than 0.1%, to close at 34,292.29. The blue-chip index was lifted by 2.4% gain in shares of NIKE, Inc. NKE and 1.3% gain in The Home Depot, Inc. HD. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 added 1.19 points, or less than 0.1%, to close at a record high of 4,291.80. The broader index managed its fourth-straight record close despite only three of its 11 major sectors closing in the green. The technology sector led gains advancing 0.7% on Tuesday. A 1.7% decline in the utilities sector and more than 0.5% loss in energy and communication services weighed over the index and capped gains.
The S&P 500 financials sector came under pressure after five of the six largest banks in America said they would increase dividends after the Federal Reserve last week lifted previous temporary restrictions on dividends and share buybacks. Shares of Wells Fargo & Company WFC and Bank of America Corporation BAC declined 2.2% and 1.6%, respectively. However, Morgan Stanley MS jumped 3.4% after the bank announced that it will double its quarterly dividend and a $12 billion stock buyback program.
The Nasdaq Composite Index closed at a record high of 14,528.33, adding 27.83 points, or 0.2%. The tech-laden index continued its consecutive record close led by rally in big tech, both Apple Inc. AAPL and Microsoft Corporation MSFT added at least 1% yesterday. Among its highest gainers were Pinduoduo Inc. PDD that added 6.9%. Chip stocks also lifted the index higher, with Skyworks Solutions, Inc. SWKS adding 4.5%, and Advanced Micro Devices, Inc. AMD and QUALCOMM Incorporated QCOM added 2.8% and 2.1%, respectively.
Overall, the fear-gauge CBOE Volatility Index (VIX) increased 1.7%, to close at 16.02. Declining issues outnumbered advancing ones for 1.18-to-1 ratio on the NYSE, while a 1.51-to-1 ratio on the Nasdaq favored decliners. The S&P 500 posted 38 new 52-week highs and no new lows, while the Nasdaq Composite recorded 93 new highs and 38 new lows. A total of 9.60 billion shares were traded on Tuesday, lower than the last 20-session average of 11.1 billion.
Consumer Confidence Hits Highest Level Since the Pandemic
On Tuesday, the Conference Board reported that its Consumer Confidence Index climbed to 127.3, outpacing the consensus estimate of 118.7. May’s figure was also upwardly revised to 120. Per the report, consumer confidence now stands at its highest level since the coronavirus pandemic’s first surge in March last year. Though the short-term inflation expectations have increased, it has barely dented consumers’ confidence or purchasing intentions.
Additionally, consumers planning to purchase homes, automobiles, and major appliances have all increased this month and indicates that consumer spending will continue to support economic growth and help it to rebound in the short-term. Consumers have also shown intension in spending on leisure and vacations.
Home Prices Jumped at an Extraordinary Rate
The S&P Dow Jones Indices reported yesterday that its S&P CoreLogic Case-Shiller Indices saw an annual gain of 14.6% in April, up from 13.3% in the previous month. The 10-city composite was up 1.9% in April and up 14.4% year over year, while the 20-city composite was 14.9% higher annually and 2.1% for the month of April.
Phoenix, San Diego, and Seattle are among the 20 cities that have reported the highest year-over-year gain, rising 22.3%, 21.6% and 20.2%, respectively. Home prices have been shooting high in the last 11 months as buyer demand continues to outpace supply.
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Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report Wells Fargo & Company (WFC): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NIKE, Inc. (NKE): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Skyworks Solutions, Inc. (SWKS): Free Stock Analysis Report Pinduoduo Inc. Sponsored ADR (PDD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment ResearchThe views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
