Markets closed sharply higher on Tuesday, led by a rally in tech stocks, with shares of Amazon hitting an all-time high. Moreover, investors’ confidence was reinstated as Fed Chairman Jerome Powell expressed an optimistic U.S. economic view. Powell also said that the Central Bank won’t change monetary policy in a rush. This saw all three major indexes ending the day in positive territory, with the Nasdaq hitting a record high.
The Dow Jones Industrial Average (DJI) rose 0.2%, to close at 25,119.89. The S&P 500 jumped 0.4% to close at 2,809.55. The Nasdaq Composite Index closed at 7, 855.12, increasing 0.6%. A total of 6 billion shares were traded on Tuesday, lower than the last 20-session average of 6.54 billion shares. Advancers outnumbered decliners on the NYSE by a 1.39-to-1 ratio. On Nasdaq, a 1.38-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The Dow gained 55.53 points, registering a four-day long winning streak and posting its eighth rise in the last nine sessions. The Dow also got a boost from tech stocks along with strong earnings from Johnson & Johnson (JNJ – Free Report) . Shares of Johnson & Johnson jumped 3.5%. Johnson & Johnson has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 added 11.12 points, with materials leading the rally. The Materials Select Sector SPDR (XLB) gained 1.4%, while the Technology Select Sector SPDR (XLK) and the Consumer Staples Select Sector SPDR (XLP) gaining 0.7% and 0.8%, respectively.
The tech heavy Nasdaq gained 49.40 points. A rally in tech stocks, led by Amazon (AMZN – Free Report) and a rebound in Netflix (NFLX – Free Report) , saw the Nasdaq posting its third record close this month. The Nasdaq fell as much as 0.7% earlier in the session before closing 0.6% up.
Tech Stocks Give Markets a Boost
Tech stocks once again helped markets, as investors continue to fend off trade war fears. Amazon was one of the best performers after data from Feedvisor reflected robust sales in the first 12 hours of Prime Day. This saw the company’s shares hitting a record high. Shares of Amazon increased 1.2%. Shares of Netflix too rebounded and closed just 5.2% lower. The company’s shares had initially fallen as much as 14.1% after it reported weaker-than-expected new subscriber additions.
This took a toll on other tech stocks earlier in the session with shares of Alphabet, Inc. (GOOGL – Free Report) and declining as much as 1.2%, while Amazon and Facebook, Inc. (FB – Free Report) falling 1%. However, losses were recouped later in the session with Alphabet and Facebook closing 1.4% and 1.3% higher, respectively. The rally in tech stocks saw Nasdaq closing at a record high for the third time in this month.
Powell Statement Boosts Investors’ Confidence
On Tuesday, Powell gave indications that the Central Bank won’t rush toward changing monetary policy and that it would be show flexibility if the situation changes. In a testimony to Senate Banking Committee, Powell also indicated that he supports more rate hikes given the stronger U.S. economic growth. He further said that he believes in gradually increasing the interest rate, indicating that the Central Bank wouldn’t be too aggressive on hiking rates.
Notably, on Monday, the International Monetary Fund (IMF) had warned that tariffs and retaliatory tariffs could weigh on the global economic recovery and that the U.S. in particular is vulnerable to a slowdown in its exports.
Stocks That Made Headlines
CSX Q2 Earnings Top Estimates on Lower Costs & Solid Pricing
CSX Corporation (CSX – Free Report) reported better-than-expected results in the second quarter of 2018. (Read More)
United Continental Beats on Q2 Earnings, Raises View
United Continental Holdings, Inc. (UAL – Free Report) reported better-than-expected results in the second quarter of 2018. (Read More)
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