Nasdaq scores new record lifted by Apple, Amazon and Microsoft

New home sales also showed a healthy uptick

U.S. stocks rallied on Tuesday, with the Nasdaq reaching a record close for the 21st time this year as optimism on the economy and trade outweighed concerns about a second wave of coronavirus cases.

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New all-time highs for big tech names including Apple, Amazon and Microsoft drove the tech-heavy index's gains.

TickerSecurityLastChangeChange %
I:COMPNASDAQ COMPOSITE INDEX12433.834122+56.65+0.46%
AAPLAPPLE INC.121.78-1.16-0.94%
AMZNAMAZON.COM INC.3,165.64-21.09-0.66%
MSFTMICROSOFT CORP.213.36-0.88-0.41%

The Dow Jones Industrial Average rose over 130 points, or 0.50 percent, while the S&P 500 gained 0.43 percent, helped by positive economic data.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES30139.83+170.31+0.57%
SP500S&P 5003688.64+21.92+0.60%

Sales of new homes rose a surprisingly strong 16.6 percent in May, the Commerce Department reported Tuesday, to a seasonally adjusted annual rate of 676,000. That's good news for companies from D.R. Horton to Pulte Group and KB Home.

TickerSecurityLastChangeChange %
TOLTOLL BROTHERS48.52+1.26+2.67%
KBHKB HOME34.94-0.02-0.06%
DHID.R. HORTON INC.71.85-0.57-0.79%
PHMPULTE CORPORATION42.66-0.49-1.14%

June data on U.S. business output, illustrated through the Purchasing Manager's Index from IHS Markit, showed the downturn easing notably. Service and manufacturing output together rose to 46.8, a four-month high, though still below the demarcation line of 50 that separates contraction from expansion, the organization said Tuesday.

The U.S. economy has only now begun to reopen after shelter-in-place orders intended to curb the spread of the virus ground business to a virtual standstill this spring, but both retail sales and home sales have shown promising signs.

"The downturn has been fiercer than anything seen previously, leaving a deep scar which will take a long time to heal," Chris Williamson, chief business economist at IHS Markit, said in a statement. "We anticipate that the U.S. economy will contract by just over 8 percent in 2020. The coming months will, therefore, see the focus turn to just how much recovery momentum the economy can muster to recoup this lost output."

Investors also welcomed President Trump's positive comments on his signature trade deal with China, walking back a top adviser's statement that called the pact's status into question over Beijing's handling of the COVID-19 pandemic.

"The China trade deal is fully intact," the president said on Twitter, hours after Peter Navarro described the administration's avid support for the agreement as "over" during an interview with Martha MacCallum on Fox News' "The Story" on Monday evening.

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“My comments have been taken wildly out of context," Navarro clarified in a later statement. "They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world."

The White House has previously criticized Beijing over the COVID-19 pandemic; the disease was first identified in the Chinese city of Wuhan late last year and has since spread worldwide, infecting 9.1 million people and killing more than 470,000.

In the pharmaceutical industry, therapeutics company Translate Bio rose after an agreement worth nearly $2 billion expanded its partnership with Sanofi Pasteur on messenger RNA vaccines for infectious diseases including COVID-19.

Germany's Bayer AG was buoyed by a report in Handelsblatt, later picked up by Bloomberg, that it's close to an $8 billion to $10 billion settlement in litigation over Roundup weed-killer, a product it gained with the acquisition of Monsanto in 2018.

TickerSecurityLastChangeChange %
TBIOTRANSLATE BIO INC22.29+0.31+1.41%
SNYSANOFI S.A.50.93+0.82+1.64%
BAYRYBAYER AG14.535+0.01+0.03%

In the food industry, a Chinese ban on imports from a single Tyson Foods poultry plant where a COVID-19 outbreak occurred prompted concerns about the impact on the U.S. meat industry if the prohibition is widened.

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Plant-based meat producers, however, were buoyed by Starbucks' decision to add a breakfast sandwich made with sausage from Impossible Foods to its U.S. menu; it already offers items with Beyond Meat products in China.

TickerSecurityLastChangeChange %
TSNTYSON FOODS INC.69.71+0.56+0.81%
HRLHORMEL FOODS47.01-0.21-0.44%
BYNDBEYOND MEAT INC.138.82-0.53-0.38%
SBUXSTARBUCKS CORPORATION102.81+2.69+2.69%

In commodities, West Texas Intermediate crude, the U.S. benchmark, slipped 0.88 percent $40.37, while gold spiked 0.88 percent to $1,772 an ounce - the highest level since October of 2012.

In European markets, equities climbed after the purchasing manager's index spiked in June, reaching a point just short of the level that indicates the economy is growing again after a sharp plunge in the spring.

Germany's DAX paced gains, climbing 2.13 percent, while France's CAC 40 rose 1.39 percent and Britain's FTSE climbed 1.21 percent.

Asian markets posted gains across the board, with Hong Kong's Hang Seng rising 1.6 percent, Japan's Nikkei up 0.5 percent and China's Shanghai Composite gaining 0.18 percent.

The Associated Press contributed to this report.