By Victor Reklaitis and Wallace Witkowski, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks climbed Tuesday after a
better-than-expected jump in July housing starts and upbeat
earnings reports, and Apple Inc. shares flirted with an all-time
split-adjusted high.
Home Depot Inc. (HD) was the biggest gainer in the Dow Jones
Industrial Average in the wake of quarterly results that topped
forecasts.
The S&P 500 (SPX) advanced 10 points, or 0.5%, to 1,982,
while the Dow industrials(DJI) rose 87 points, or 0.5%, to 16,925.
The S&P 500 is nearing its July 24 record close at 1,987.98,
recovering from its drop in late July and early August.
The Nasdaq Composite (RIXF) advanced 19 points, or 0.4%, to
4,527 after the tech-laden index on Monday scored its highest close
since March 31, 2000.
The Commerce Department on Tuesday said construction on U.S. new
homes rose 15.7% in July to an annual rate of 1.09 million, well
above forecasts, and the June drop in new construction was revised
to a much smaller decline.
"I think investors will be encouraged to an extent by the
revisions in the data," said Andrew Wilkinson, chief market analyst
at Interactive Brokers. He also said geopolitical concerns seem to
be receding, even though there's no resolution in the
Ukraine-Russia conflict, and that "just gives added impetus to the
bulls."
In other economic news, the Labor Department said U.S. consumer
prices rose 0.1% in July, matching forecasts and signaling
inflation isn't flaring up.
What strategists are saying: Wouter Sturkenboom, strategist at
Russell Investments in London, said he is modestly positive on
equities. The rest of the week "is going to be about the FOMC
(Federal Open Market Committee) minutes and Jackson Hole
conference," he said in emailed comments.
"On both counts, we and the market expect the prevailing dovish
stance to hold, providing upside momentum for markets," Sturkenboom
added, but said owing to valuation concerns, his firm remains
neutral on U.S. stocks.
The FOMC minutes hit Wednesday, and Federal Reserve Chairwoman
Janet Yellen will speak on Friday at the central bank's conference
in Jackson Hole, Wyo.
Stocks have rallied in recent sessions mostly because investors
are no longer frightened about rising interest rates, said Bruce
Bittles, chief investment strategist at R.W. Baird. Some soft
economic news in the U.S. and overseas, such as for jobless claims
and retail sales, indicate the low-rate regime that's boosted
stocks will continue.
"All of a sudden, the theory that we were in a rising interest
rate environment in the U.S. turned out to be perhaps premature,"
Bittles told MarketWatch. He argued that while geopolitical fears
have spiked and then eased, they're largely background noise.
Movers & shakers: Home Depot shares rose 6%, and
home-builder shares staged a rally with D.R Horton Inc.(DHI),
Ryland Group Inc.(RYL), and Lennar Corp. (LEN) shares all advancing
at least 3%.
TJX Cos.(TJX) climbed 10% to lead the S&P 500 after its
quarterly results surpassed expectations. (Read more on the day's
notable movers here:
http://www.marketwatch.com/story/home-depot-dicks-sporting-goods-medtronic-report-earnings-tuesday-2014-08-19.)
Apple(AAPL) shares rose 1.4% to $100.52. On a post-split basis,
the stock notched a record close of $100.30 on Sept. 19, 2012, and
a record intraday high of $100.72 on Sept. 21, 2012. The tech giant
executed a 7-for-1 stock split in June.
Other markets:Japanese stocks rose for a seventh day, boosted by
Wall Street gains from Monday. European stocks pushed higher,
helped by a leap by Danish shipping and oil conglomerate A.P.
Møller-Maersk AS . Oil (CLU4) and gold (GCZ4) dipped.
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