Stock market news live updates: Stocks rise after record retail sales jump, reports of more stimulus
Equities rose on Tuesday after retail sales in May were significantly stronger than expected, boosting investor confidence in a rapid economic recovery. Reports of additional Trump administration incentives in the form of a $ 1 trillion infrastructure package and hopes that a common drug could help treat coronavirus patients also contributed to the rally's catalysis.
Retail sales in May rose a record 17.7% from April, more than double the 8.4% consensus estimate. This followed a record 14.7% drop in retail sales in April. The reversal indicated that consumer spending picked up again when companies started reopening in May.
"We have been used to record record lows in economic fundamentals in the past few months, and seeing that the pendulum has been swinging the other way so far is nothing, if not encouraging," said Mike Loewengart, executive director of investment strategy at E- Trade Financial Corporation said in an email Tuesday. "Looking at the total this morning, this is another indicator that a V-shaped recovery could be more likely than we originally thought."
Regardless, investors also looked at several reports that found that the widely used steroid dexamethasone was found to help lower mortality rates in patients with severe cases of Covid-19, according to study results.
The higher stock movements caused the three main indices to rise higher for a third session in a row.
Tuesday's developments contributed to risk sentiment after the Federal Reserve announced on Monday that it would expand its own stimulus package for the virus-stricken economy. The Fed announced plans to begin buying individual corporate bonds as part of its emergency credit program and to expand the Fed's previously announced secondary market corporate credit facility, which until Monday included only the purchase of exchange-traded funds.
"I think they're trying to get rid of the perception that they prefer one company or industry to another to spread it," Kathy Jones, chief fixed income strategist at Charles Schwab, told Yahoo Finance . “But here, too, the bonds have to meet their criteria, which means that they are not buying the bonds with the lowest credit rating on the high yield market. You will buy those with a higher credit rating and a term of up to five years. "
The plethora of more positive economic data combined with additional economic news drew investors' attention, at least temporarily, from the signs of increasing coronavirus cases in some parts of the country. Texas and Florida each reported record coronavirus cases earlier this week, and other states, including Arizona and California, have recently seen an increase in cases where their own reopening was in progress.
Travel and leisure stocks such as American Airlines, Norwegian Cruise Line Holdings, Royal Caribbean International and Hilton, whose stocks have been largely in step in recent weeks due to the reopening of the states, gained in late trading.
4:05 p.m. ET: Shares rise for a third consecutive year after a record jump in retail sales
Here were the main moves in the markets from 4:05 p.m. ET:
S & P 500 (^ GSPC): +58.15 (+ 1.90%) to 3,124.74
Dow (^ DJI): +526.82 (+ 2.04%) to 26,289.98
Nasdaq (^ IXIC): +169.84 (+ 1.75%) to 9,895.87
Crude Oil (CL = F): + $ 1.05 (+ 2.83%) to $ 38.17 per barrel
Gold (GC = F): + $ 7.30 (+ 0.42%) to $ 1,734.50 an ounce
10-year Treasury (^ TNX): +5.4 basis points for a return of 0.7560%
12:31 PM ET: Shares hold higher when the session begins
Here were the main moves in the markets from 12:31 p.m. ET:
S&P 500 (^ GSPC): +58.02 points (+ 1.89%) to 3,124.61
Dow (^ DJI): +555.1 points (+ 2.15%) to 26,318.26
Nasdaq (^ IXIC): +161.64 points (+ 1.66%) to 9,887.66
Crude Oil (CL = F): + $ 0.26 (+ 0.7%) to $ 37.38 a barrel
Gold (GC = F): + $ 8.60 (+ 0.5%) to $ 1,735.80 per ounce
10-year Treasury (^ TNX): +4.9 basis points for a return of 0.751%
10:17 AM ET: Powell says a full recovery is "unlikely" until the public views the virus as contained
Federal Reserve chairman Jerome Powell began delivering his biannual monetary report to Congress on Tuesday morning, reaffirming the Federal Reserve's cautious stance on the pace of economic recovery as the US coronavirus pandemic continues.
"There remains significant uncertainty about the timing and strength of the recovery," Powell said in prepared remarks. “Much of this economic uncertainty stems from uncertainty about the course of the disease and the effects of measures to contain the disease. Until the public is confident that the disease is contained, a full recovery is unlikely. "
However, Powell noted that "some indicators point to stabilization and in some areas a slight recovery in economic activity" and highlighted the much stronger than expected May employment report.
10:03 am ET: The National Association of Home Builders index is growing faster than expected, showing that "real estate is well positioned to drive the economy."
The National Association of Home Builders' (NAHB) confidence index for builders rose by 21 points to 58 in June, exceeding the pressure of 45 points expected by consensus economists. Values above 50 reflect a positive market.
"With the nation's reopening, housing is well positioned to fuel the economy," said Dean Mon, chairman of the NAHB, in a statement. “Inventories are scarce, mortgage applications are increasing, interest rates are low, and confidence is increasing. And buyer traffic has more than doubled in a month, although builders are reporting growing online and phone requests due to the outbreak. "
10:01 am ET: Corporate holdings fell more than expected in April
US corporate holdings declined more than expected in April as the coronavirus pandemic weighed on imports and global trade.
Business inventories decreased 1.3% in April, a 0.3% decrease from March. Motor vehicle inventories fell by 8.4% and depressed overall pressure. Retail inventories excluding cars, a measure of gross domestic product calculation, decreased by 1.1%.
9:31 am ET: Shares open significantly higher
Here were the main moves in the markets from 9:31 a.m.CET:
S&P 500 (^ GSPC): +83.22 points (+ 2.71%) to 3,149.81
Dow (^ DJI): +795.79 points (+ 3.12%) to 26,567.07
Nasdaq (^ IXIC): +210.74 points (+ 2.17%) to 9,940.37
Crude Oil (CL = F): + $ 1.09 (+ 2.94%) to $ 38.21 per barrel
Gold (GC = F): + $ 0.70 (+ 0.04%) to $ 1727.90 per ounce
10-year Treasury (^ TNX): +7.1 basis points for a return of 0.773%
9:20 am ET: Industrial production recovered, but in May with a less-than-expected margin
Domestic industrial production rose 1.4% in May after a record 12.5% drop in April, Federal Reserve data said Tuesday. Consensus economists had expected industrial production to increase 3% per month as factories, mines and utilities resumed operations in May. The increase in production in May was due to the production of motor vehicles and spare parts.
Capacity utilization or a measure of the share of a plant used also recovered slightly in May. This rose from 64% in April to 64.8% in May.
8:30 a.m.ET: Retail sales increase 17.7% in May after the record break in April
Retail sales rose in May versus April after a record decline, a sign that consumer spending was beginning to recover from a nadir in the wake of the coronavirus pandemic.
Retail sales rose 17.7% in May after falling 16.4% in April compared to the previous month, the Ministry of Commerce said in its preliminary report on Tuesday. Consensus economists expected retail sales to increase 8.4% in May, according to Bloomberg data.
Excluding car and gas sales, retail sales rose 12.4%, better than the 5.1% increase expected in May. This retail sales measurement decreased 16.2% in April compared to March.
7:28 am ET Tuesday: Shares race for the third day in a row
"The second wave for the markets is more likely than a second wave of COVID-19": expert
Mike Bailey, Research Director of FBB Capital Partners, discusses with Yahoo Finance's The First Trade what moves the markets around the opening bell on Monday.
Here were the key steps during the pre-market session from 7:28 p.m. ET Tuesday:
S&P 500 futures (ES = F): 3,107.75, plus 34.75 points or 1.13%
Dow futures (YM = F): 26,222.00, plus 417 points or 1.62%
Nasdaq futures (NQ = F): 9,901.00, plus 100.5 points or 1.03%
Crude Oil (CL = F): + $ 0.62 (+ 1.67%) to $ 37.74 per barrel
Gold (GC = F): + $ 7.30 (+ 0.42%) to $ 1,734.50 an ounce
10-year Treasury (^ TNX): +4.4 basis points for a return of 0.746%
6:02 p.m. ET Monday: Stock futures open higher
Here were the key steps at the start of the overnight US futures session from 6:07 p.m. ET:
S&P 500 futures (ES = F): 3,085.00, plus 12 points or 0.39%
Dow futures (YM = F): 25,926.00, plus 121 points or 0.47%
Nasdaq futures (NQ = F): 9,828.75, plus 28.25 points or 0.29%
A trader wears a face mask on the floor of the New York Stock Exchange (NYSE) after traders tested positive for coronavirus disease (COVID-19) on March 19, 2020 in New York, United States. REUTERS / Lucas Jackson TPX IMAGES OF THE TAG
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