U.S. stocks soared on Tuesday, with the major indexes touching fresh highs on the heels of upbeat vehicle sales data and bullish sentiment around M&A. Nearly all the major sectors were higher, with Healthcare and Tech leading gains. Energy lagged while Utilities was the only group to finish in the red. Gold is up, Oil is flat, and the dollar is slightly higher against its rivals.
Quarterly performance figures for the S&P 500 show the benchmark index rose 4.69% in Q2 vs a 1.30% rise in Q1. Energy was the top performing sector in Q2, up 11.45% vs a 0.19% rise in Q1. Financials were the notable laggard, rising 1.84% in Q2 vs 2.15% last quarter.
Reaction from today’s US economic news was somewhat muted, with the Institute for Supply Management’s index of national factory activity coming in at 55.3 in June, which was little changed from May's 55.4 reading and just shy of consensus of 55.8. Construction spending edged up 0.1% in May to an annual rate of $956.1B, according to the Commerce Department. The reading was short of +0.5% estimates, however April’s data was revised to show a 0.8% rise from +0.2%
Market Indices/Statistics:
- Dow closed up 129.47 pts. / +0.77% to 16,956.07; 26 of the 30 Dow stocks closed higher.
- S&P closed up 13.09 pts. / +0.67% to 1,973.32; 9 of the 10 S&P 500 sectors closed higher.
- Nasdaq closed up 50.47 pts. / +1.14% to 4,458.65
- Healthcare was the strongest sector (+1.26%) Utilities were the weakest (-0.98%)
- The VIX is down 0.42 to 11.15
- Gold is up 5.0 to 1327.0
- Oil is unch at 105.37
- Nat Gas is down 0.012 to 4.428
- Yen vs. Dollar is up 0.25 to 101.54
- Euro vs. Dollar is down 0.0015 to 1.3677
- The US Dollar Index (DXY) is up 0.05 at 79.83
Top Headlines:
Better than expected June US auto sales provided a boost today, with General Motors Co (NYSE: GM, $37.59, +3.55%) posting a surprise increase of 9.4% and topping expectations of a 6.3% slip. Chrysler Group LLC’s results showed better year-over-year growth, selling 171,086 vehicles in June, up 9.2% from a year ago. Both GM and Chrysler said it was their best June sales results in seven years.
Some of the day’s deal news came from medical device maker Cooper Companies Inc (NYSE: COO, $146.95, +8.43%), who agreed to acquire European soft contact lens manufacturer Sauflon Pharmaceuticals for $1.2 billion. The transaction, anticipated to close by the end of Q3, is expected to add to Cooper’s EPS in fiscal 2015 on an adjusted basis and would strengthen Cooper's presence in the fast-growing segment of disposable contact lenses.
Shares of Twitter Inc (NYSE: TWTR, $42.05, +2.64%) rose on news that a former Goldman Sachs executive Anthony Noto would become the company's new chief financial officer while current CFO Mike Gupta will become senior vice president of strategic investments.
A recent WSJ article said companies purchasing their own shares represent the biggest category of stock buyers today, adding that only one other major group, individuals, is a net buyer right now. Other major groups such as hedge funds, foreigners, insiders and institutions – are all net sellers. The article also highlighted concerns about the extent to which buybacks are padding earnings, noting that estimates of half of the S&P 500’s per-share earnings gains in Q1 came from declining share count, rather than increases in actual earnings.
Coming Wednesday
U.S. Economic Reports:
MBA Mortgage Applications (27-Jun) at 7am ET - prior (1.2%)
Challenger Job Cuts (Jun) at 7:30am ET – prior 52.961K
ADP Employment Report (Jun) at 8:15am ET – consensus +206K, prior +179K
Factory Orders (May) at 10:00am ET – consensus (0.4%), prior +0.7%
Earnings Wednesday:
Constellation Brands (STZ); UniFirst Corporation (UNF); Synnex (SNX)
Here at the NYSE- Opening and Closing Bells
On Wednesday, July 2, 2014,Matt Ouimet, Cedar Fair Entertainment Company’s President and CEO, will ring the NYSE Closing Bell remotely from Cedar Point Amusement Park in Sandusky, Ohio to celebrate the start of summer and to celebrate FUN.
On Wednesday, July 2nd, Veritiv (NYSE: VRTV), the North American leader in business-to-business distribution solutions, will begin trading on the New York Stock Exchange. Chairman and CEO Mary Laschinger, joined by other Veritiv employees, will ring the NYSE Opening Bell to highlight the occasion.
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Thanks and have a great evening!