After opening on a positive note Tuesday morning, U.S. stocks stayed firm right through the day’s session, and closed with strong gains thanks to sustained buying at several counters.
Strong retail sales and industrial production data, some upbeat earnings updates and Fed Chair Jerome Powell’s positive comments about the strength of the economy helped lift sentiment.
Powell said he is confident that the central bank can raise rates and deal with inflation without sending the economy into recession, although he noted that it will be a challenging task.
“The economy is strong. We think it is well positioned to withstand less accommodative monetary policy,” Powell said.
Data released by the Commerce Department showed retail sales climbed by 0.9 percent in April after jumping by an upwardly revised 1.4 percent in March. Economists had expected retail sales to rise by 0.7 percent compared to the 0.5 percent increase originally reported for the previous month.
Excluding a rebound in sales by motor vehicle and parts dealers, retail sales rose by 0.6 percent in April after surging by 2.1 percent in March. Ex-auto sales were expected to edge up by 0.3 percent.
Industrial Production in the United States increased 6.4 percent year-on-year in April of 2022, following a downwardly revised 5.4 percent rise in AMarch.
The major averages all ended with impressive gains. The Dow ended with a gain of 431.17 points or 1.34 percent at 32,654.59. The S&P 500 settled higher by 80.84 points or 2.02 percent at 4,088.85, while the Nasdaq climbed 321.73 points or 2.76 percent to settle at 11,984.52, just a few points off the day’s high.
Financials stocks had a pretty good outing. JP Morgan Chase, Bank of America, Wells Fargo, American Express, Visa and Goldman Sachs gained 3 to 4 percent.
Boeing climbed more than 6 percent. Walt Disney, Cisco Systems, Intel, Nike, Caterpillar, Apple, Honeywell International, IBM and Microsoft moved up 2 to 3.5 percent.
Shares of The Home Depot. Inc gained about 1.7 percent after the company said its bottom line totaled $4.23 billion, or $4.09 per share in the first-quarter, compared with $4.15 billion, or $3.86 per share in the corresponding quarter last year.
Walmart shares plunged more than 11 percent after first-quarter results fell short of expectations. The supermarket giant also cut its guidance for second-quarter and the full-year.
In overseas trading, Asian stocks finished broadly higher on Tuesday after reports that Shanghai was seeing a strong recovery from COVID cases, with plans in pace to ease lockdown restrictions in stages.
European stocks closed on a strong note on Tuesday, lifted by some encouraging economic data from the region, and on expectations of demand revival in China after Shanghai pledged to gradually ease its Covid lockdown in June.
The pan European Stoxx 600 climbed 1.22%. The U.K.’s FTSE 100 gained 0.72%, Germany’s DAX surged up 1.59% and France’s CAC 40 advanced 1.3%, while Switzerland’s SMI ended 0.5% up.
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