From Market Insider
- US stocks gained on Tuesday as investors mulled corporate earnings and encouraging economic data out of China.
- The S&P 500 and the Nasdaq composite indexes continued their hot streaks, closing at record highs.
- Zoom Video Communications leaped alongside other so-called work-from-home stocks after trouncing Wall Street’s second-quarter estimates and raising its forward guidance.
- The Institute for Supply Management’s purchasing managers’ index climbed to 56 in August from 54.2, signaling continued strength in the US manufacturing industry’s recovery.
- Oil gained amid new weakness in the US dollar. West Texas Intermediate crude climbed as much as 1.9%, to $43.43 per barrel.
US equities climbed on Tuesday amid a rally in so-called work-from-home stocks and positive manufacturing data out of China. The S&P 500 and the Nasdaq composite indexes continued their hot streaks, closing at record highs.
Zoom surged after reporting second-quarter earnings on Monday afternoon that handily beat Wall Street’s estimates. The company’s revenue more than quadrupled from the year-ago period, and earnings for the quarter were more than double what analysts expected. Zoom also boosted its forward guidance.
Other work-from-home stocks, including Slack, Okta, and DocuSign, gained following the earnings beat. The group led tech stocks higher and drove both the S&P 500 and the Nasdaq to record intraday highs.
Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:
- S&P 500: 3,526.65, up 0.8%
- Dow Jones industrial average: 28,645.66, up 0.8% (216 points)
- Nasdaq composite: 11,939.67, up 1.4%
Chinese manufacturing indicators offered investors an optimistic look at economic recoveries abroad. The Caixin China manufacturing purchasing managers’ index — which primarily tracks small manufacturers — gained to 53.1 in August from 52.8, Caixin and Markit said Tuesday. The reading, the gauge’s highest since January 2011, indicates strong expansion in the once beleaguered industry.
US manufacturing data released later Tuesday mirrored the positive trends abroad. The Institute for Supply Management’s PMI gained to 56 in August from 54.2, its fastest rate of expansion in nearly two years.
Indexes extended gains following the data’s release. Tech stocks led the S&P 500’s gains, followed by rising communication-services and materials stocks.
Apple rallied to a record after Bloomberg reported that the company had asked suppliers to manufacture 75 million next-generation iPhones for a fall launch. The sum is in line with Apple’s 2019 iPhone production target, signaling that it expects demand to hold up through the pandemic and the economic downturn. The tech giant soared in Monday trading as well, following its 4-for-1 stock split.
Walmart leaped after announcing that it would launch Walmart Plus, its Amazon Prime competitor, in mid-September.
Kodak surged after a Securities and Exchange Commission filing published Monday said the hedge fund D. E. Shaw & Co. bought nearly 4 million shares. The purchase represented a 5.2% stake in the company and followed volatile price action in late July linked to the company receiving a government loan that’s since been frozen.
The S&P 500 on Monday closed out its best August since 1986. The S&P 500 and the Nasdaq composite posted numerous record highs through the end of the month on surging tech giants, while the Dow erased its 2020 losses. Stocks leaped through the month on promising consumer-spending trends and a new monetary policy framework from the Federal Reserve that aims to boost employment and stabilize inflation.
Spot gold fell after approaching the $2,000-per-ounce threshold. The precious metal swung higher in recent sessions as the US dollar returned to two-year lows and investors weighed the Fed’s new inflation strategy.