Stocks posted strong gains on Tuesday, Nov. 21, and the three U.S. benchmark indexes scored fresh intraday record highs as retail earnings and strength in the tech sector shored up some optimism ahead of the Thanksgiving holiday and Black Friday.
The Dow Jones Industrial Average gained 175 points, or 0.75%. The S&P 500 Index rose 17 points, or 0.66%, to surpass 2,600 points for the first time. The Nasdaq increased 63 points, or 0.93%.
All sectors moved higher Tuesday, but tech stood out as the leader. The Technology Select Sector SPDR ETF (XLK) gained 1% and the iShares S&P North American Tech Sector Index Fund (IGM) increased 1.13%. Tech names were also leading the Dow, with Apple Inc. (AAPL) and Microsoft Corp. (MSFT) leading the blue-chip index up 1.9% and 1.3%, respectively. All but one Dow components -- Walmart Stores Inc. (WMT) -- were in the green Tuesday.
After stocks rebounded on Monday, Nov. 20, following two weeks of losses, investors now face a shortened Thanksgiving week light on economic events. Markets will be closed on Thursday, Nov. 23, for Thanksgiving, and will open for a half-day of trading on Friday, Nov. 24.
Federal Reserve Chair Janet Yellen is scheduled to speak at New York University at 6 p.m. Tuesday. Yellen submitted her resignation to President Donald Trump on Monday, announcing she would step down from the Federal Reserve board when her successor, Jerome Powell, is sworn in as Fed chairman in February.
Investors will listen carefully for any indications Yellen might give of upcoming interest rate increases. The market has priced in with near certainty that the Fed will hike rates at its next meeting on Dec. 12-13.
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Existing home sales for October totaled 5.48 million, increasing 2% and topping Wall Street's consensus estimate of 5.43 million. Sales are now at their strongest pace since June. The median price of a U.S. home last month was $247,000, up from $234,100 in October 2016. The price increase marked the 68th-straight month of year-over-year gains, according to the National Association of Realtors.
Tax reform remains a key concern for Wall Street, but with no scheduled legislative events during this shortened trading week retail and tech earnings have somewhat taken the spotlight.
Urban Outfitters Inc. (URBN) posted third-quarter earnings and revenue that bested analysts' forecasts, sending shares higher Tuesday. The parent company of Free People and Anthropologie saw sales in the quarter rise 3.5% to $893 million, a record for the retailer. Same-store sales in the period rose 1%. Urban Outfitters stock gained 4%.
The two earnings beats came as a welcome surprise for the retail sector, which has lagged all year as e-commerce threats from Amazon.com Inc. (AMZN) shake the foundation of traditional bricks-and-mortar sales. The SPDR S&P Retail ETF (XRT) has underperformed the broader market since the start of this year, down 4.5% compared to the S&P 500 Index's more than 15% gains. The retail ETF decreased 1.3% after trading higher in premarket action Tuesday as constituents readied for the busiest time of the year with Black Friday and the upcoming holiday season.
AT&T Inc. (T) Chairman and CEO Randall Stephenson and the company's outside counsel displayed some very thinly veiled displeasure with the Department of Justice on Monday, after the DOJ announced it is pursuing a lawsuit to block the telecom giant's merger with Time Warner Inc. (TWX) .
"This defies logic and it is unprecedented," Stephenson said of the suit.
AT&T shares slipped 0.22% Tuesday, while Time Warner shares rose 2.3%.
Tencent Holdings Ltd. (TCEHY) reached another major milestone on Tuesday when it became the first Asia-listed technology company to reach a market valuation of $500 billion, besting rival Alibaba Holding Ltd. (BABA) and topping Facebook Inc. (FB) in the emerging battle for global social media dominance.
Tencent shares closed up 2.38% in Hong Kong at HK$430 each, extending their year-to-date gain past 125% and giving the company a market capitalization of just more than HK$4.08 billion ($522 billion), edging past Facebook's $519 billion and Alibaba's $484.5 billion.
WTI crude oil futures for December delivery increased 0.58%, or 33 cents, to $56.75 per barrel Tuesday. The increase in price comes as investors continue to expect an extension of OPEC production cuts at the group's meeting next week.
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