US stock banks, strong retail sales data growth on gains
U.S. stocks climbed on Tuesday as Citigroup Bank shares led the uptrend when Berkshire Hathaway revealed a large stake and strong retail sales in April eased concerns about a slowdown in economic growth.
Nine of the 11 major S&P sectors advanced in morning trade, with financial growth up 2.3% and technology up 1.8%.
Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp rose 1.4% to 4%, giving the S&P 500 and Nasdaq the biggest boost.
Citigroup jumped 7% to 3.5% after Warren Buffett’s Berkshire Hathaway announced a $ 3 billion investment in a U.S. lender.
U.S. retail sales rose sharply in April as consumers improved supply and frequently bought motor vehicles in restaurants, providing a strong boost to the economy early in the second quarter.
Greg Basuk, chief executive of AXS Investments in New York, said: “Retail is one of the key data points that the Fed will look at to see how aggressive (it is) it is to hold on to inflation.”
“This is a positive signal for the direction of the US economy in 2022 and potential health.”
Fed Chair Jerome Powell is scheduled to speak later in the day and his comments will be parsed to signal future interest rate hikes. Traders are now seeing an 80% chance of a 50-basis point rate increase in June.
At 10:09 am ET, the Dow Jones Industrial Average rose 292.68 points, or 0.91%, to 32,516.10, the S&P 500 rose 49.19 points, or 1.23%, to 4,057.20, and the Composite rose 816.60 points, or Nas. %, At 11,849.30.
However, rising costs weighed on Dow component Walmart Inc., which fell 8.6% after the retail giant cut its annual profit forecast, indicating a major blow to margins.
Shares of rival retailer Costco, Target, Dollar Tree fell between 0.6% and 2.2%.
Home Depot Inc. HD.N added 1.9% after boosting its full-year sales forecast on strong demand for home improvement equipment and building materials.
United Airlines Holdings Inc. rose 6.1% while Carrier raised its current quarterly revenue forecast, boosting shares of Delta Air, American Airlines and Spirit Airlines.
The Ukraine war, rising inflation, the COVID-19 lockdown in China, and the tightening of aggressive policies of the central banks have led to a positive first-quarter earnings season.
So far in May, the S&P 500 is down about 2% and the Nasdaq is down 3.9%, largely driven by rising stock declines.
U.S.-listed Chinese stocks have jumped in hopes that China will ease its crackdown on technology and the COVID-19 epidemic.
Progress issues outperformed the NYSE by a 4.05-to-1 ratio and the Nasdaq by a 3.95-to-1 ratio.
The S&P index hit a new 52-week high and 29 new lows, while Nasdaq recorded 18 new highs and 100 new lows.
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