By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished Tuesday with
solid gains, sending the S&P 500 to a record close for the
second straight session.
Sharp gains in technology stocks, including Apple Inc., the
heaviest-weighted component on the Nasdaq Composite, sent the
tech-heavy index to its highest level in nearly 8 weeks.
The Nasdaq Composite (RIXF) ended the day up 51.26 points, or
1.2%, at 4,237.07. High-growth biotechnology stocks also rallied,
with the iShares Nasdaq Biotechnology ETF up 2.5%.
The S&P 500 (SPX) closed near session highs, after hitting
an intraday record. The benchmark index gained 11.38 points, or
0.6%, to 1,911.91.
The Dow Jones Industrial Average (DJI) gained 69.23 points, or
0.4%, to 16,675.50.
The Russell 2000 index (RUT) rallied, gaining 15.96 points, or
1.4% to 1,142.15, according to preliminary data from FactSet.
Read the recap of MarketWatch's live blog of today's
stock-market action.
Bullish analysts were vindicated as stocks reached record levels
amid higher volumes. The benchmark index closed at a record level
on Friday amid the lightest trading volume this year.
Investors welcomed positive and better-than-expected headline
numbers in economic reports on Tuesday, and shrugged off some of
the negative details that worried analysts. Orders for big-ticket
items climbed thanks to demand for military equipment, but bookings
fell in most civilian categories. Home prices rose in March for the
first time in five months, however annual growth is still slowing.
Consumer confidence edged up in May, matching expectations. Markets
were closed on Monday for Memorial Day holiday.
Colin Cieszynski, chief market strategist at CMC, says that
traders came back from the long-weekend in a good mood.
"Gold is positively hammered and the fact that the S&P 500
is trading above the 1,910 level suggests there is a real flow of
capital back into riskier assets and away from havens,
Cieszynski.
"After new highs in the industrials and transports a few weeks
ago, this is a confirmation that there is breadth to this rally.
However, the fact that the Vix is so low means that investors are
getting complacent, so that is worrying," he added
Quincy Krosby, market strategist at Prudential Financial, said
headline numbers on Tuesday's economic reports were good, but one
could also find negative details.
"Durable-goods orders rose, but capex part actually declined.
Corporations are still hesitant to invest in capital expenditures.
For this market to go higher, companies must deliver top-line
growth, because we know the Fed is winding down the QE," Krosby
added.
U.S. home prices rose in March, but annual growth is slowing
down, with Las Vegas and other "boom-bust" markets posting slower
gains, according to data released Tuesday covering 20 major
cities.
A spike in demand for military hardware boosted orders for U.S.
durable goods in April, but bookings fell in most civilian
categories following even larger increases in the prior month than
previously reported.
The Conference Board said its consumer confidence index in May
rose to 83 -- matching the MarketWatch-compiled economist consensus
-- from 81.7 in April. Both the present situation and expectations
index advanced.
Hillshire soars on acquisition offer
An offer to buy Hillshire Brands Co. (HSH) for $45 a share came
from Pilgrim's Pride Corp. (PPC). Hillshire shares were up 21% to
$44.88. Hillshire earlier this month proposed to buy Pinnacle Foods
Inc. (PF) for $4.3 billion. Pinnacle shares fell 5.9%.
In corporate news, shares in car-parts retailer AutoZone Inc.
(AZO) were slightly higher after the company reported fiscal
third-quarter earnings in line with analysts' expectations.
Apple Inc. (AAPL) rose 1.9% to $625.63 as the iPhone and iPad
maker's shares closed at their highest level since August 2012.
Apple has a busy two weeks ahead, as the company will kick off its
annual developers conference on June 2. That same day, shareholders
of record will be in line for a 7-for-1 split of Apple's stock,
which will take effect on June 9.
Facebook Inc. (FB) shares rallied 3.4%, while LinkedIn Corp.
(LNKD) shares gained 3%.
Gold, oil fall
In other financial markets, European stocks closed mostly
higher, while Asia closed mixed. In Russia, the MICEX blue-chips
index dropped 2.2% as Ukraine's army said it has retaken Donetsk
International Airport, with more than 30 pro-Russian militants
killed in the process, media reports said.
Futures for crude oil (CLN4) settled with a loss on Tuesday,
pulling back from their highest close in five weeks amid a
continued focus on Ukraine, but strength in U.S. stocks in the wake
of upbeat economic data limited the fall.
Gold futures (GCM4) on Tuesday settled at their lowest level in
about three-and-a-half months as Ukraine's election results,
technical selling and equity gains combined to pull prices down by
2%.
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