U.S. equity markets rallied Tuesday as investors dipped back into large-cap technology stocks and as Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin gave fairly upbeat assessments of the U.S. economic recovery while also stating further stimulus is needed.
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The Nasdaq Composite rose 1.7%, led by Apple Inc., while the S&P 500 gained over 1%, helped by consumer cyclical stocks.
The Dow Jones Industrial Average, meanwhile, rose 140 points, or 0.52%, as Walt Disney Co. and Microsoft Corp. paced the advance. Chevron Corp. fell, limiting gains.
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Powell, who testified before the House Financial Services Committee, was optimistic about the pace of the U.S. economic recovery but reiterated the central bank is willing to provide support “for as long as it takes.”
Fresh data on existing home sales came in at an annual pace of 6 million for the month of August, the strongest since December of 2006.
Looking at stocks, Amazon Inc. was upgraded to “outperform” at Bernstein, which says the e-commerce giant will continue to gain market share as the COVID-19 pandemic has “pulled forward secular trends.” The firm believes the 16% drop that has occurred over the past three weeks has made shares attractive.
Separately, Amazon Prime Day, the single busiest day for sales for the e-commerce giant, is set for October 13, according to reports.
Meanwhile, Tesla Inc. CEO Elon Musk dialed down expectations ahead of the electric-car maker’s Battery Day Event, tweeting that whatever is announced “will not reach serious high-volume production until 2022.”
Nikola Corp. shareholders plan to sell 249.8 million shares through a secondary offering, according to U.S. Securities and Exchange Commission filing. The announcement comes a day after founder Trevor Milton stepped down as executive chairman.
Elsewhere, top GameStop Corp. investor RC Ventures raised its stake in the videogame retailer to 9.98%, up from 9.6%. The firm has expressed an interest in becoming more involved with the company and has the goal of making it a competitor to Amazon, Bloomberg reported, citing a person familiar with the matter.
Looking at earnings, AutoZone Inc. reported earnings and revenue that outpaced expectations as same-store sales rose 21.8% year-over-year, more than double forecasts.
Looking at commodities, West Texas Intermediate crude oil ticked up 29 cents to $39.60 a barrel while gold added $2.60 to $1,898.60 an ounce.
U.S. Treasurys were little changed with the yield on the 10-year note holding near 0.663%.
European markets were higher across the board with Germany’s DAX up 0.41%, France’s CAC advancing 0.4% and Britain’s FTSE adding 0.43%.
In Asia, China’s Shanghai Composite fell 1.29% and Hong Kong’s Hang Seng lost 0.98%. Japan’s Nikkei remained closed for holiday.