US shares closed higher on Tuesday, but it was the mid- and small-caps that managed to secure fresh record highs intraday.
The S&P 500 index came within half a frustrating point of breaking its August 15 record high, before paring gains for the rest of the session. More mundane than that, the market bellwether has managed to closed less than a percentage point higher or lower for a full calendar month, the longest stretch in a year.
The S&P 500 closed up 0.2% at 2,186 – seven points off a fresh record high.
Meanwhile, the S&P Midcap 400 closed up 0.5% at 1,571 after notching up a record high of 1,575.
Similarly, the S&P Smallcap 600 closed up 0.7% at 756 having earlier hit a record high at 757.
Oil prices, which earlier were sharply lower, managed to gain by the close. The West Texas Intermediate was up 0.6% to $47.68.
While markets cheered on strong earnings from the likes of retailer Best Buy (NYSE:BBY) and were wary of Friday’s speech from Federal Reserve Chair Janet Yellen which could nail when US rates will rise, the market was also buoyed by sales of newly-built US homes, which unexpectedly soared last month to the highest rate since 2007 in the latest sign of the strength of the housing market.
As investors will recall 2007 was when the first signs of the credit crunch became apparent. The housing data is significant for slaying pessimism but also risks tempting the Fed to consider raising interest rate sooner rather than later.
Midsession
US stocks climbed at midsession on Tuesday, with every major sector in the black, as investors pored over good Best Buy earnings but were wary of getting ahead of themselves with the looming Federal Reserve annual economic symposium later this week.
The S&P 500 index was up 0.3% at 2,188 and earlier came to within half a point of hitting a fresh intraday record high. It last made history on August 15 after a succession of ten record highs notched since July 11. The Nasdaq Composite had more luck, hitting a record high of 5,275.74. It was last up 0.4% at 5,264.
The materials sector logged the sharpest gains on the day, rising 1.1%, while industrials, consumer discretionary, technology and financial stocks all rose by north of 0.5 per cent. Defensive stocks lagged behind, with telecommunications, consumer staples and healthcare sectors trailing behind the broader market.
The S&P Midcap 400 was up 0.6% to 1,573. Earlier it marked 1,575 – a fresh record high, and led by Toll Brothers (NYSE:TOL), up 7.6% to $31.56 after some favourable reports on the residential construction sector.
The S&P Smallcap 600 was 0.9% to 757 – a fresh record high – and led by Daktronics Inc (NASDAQ:DAKT), up 18.3% to $8.20 after announcing bullish first quarter earnings.
But the top gainer on the S&P 500 was Best Buy (NYSE:BBY), the biggest US electronics retailer, which was up 18.8% to $38.97 after it revealed stronger-than-expected quarterly results.
Investors were also focused on the Fed’s annual conference in Jackson Hole, Wyoming that will feature a speech on Friday by chairwoman Janet Yellen and possibly an indication of when US interest rates will be hiked.
The market’s gains came despite US oil prices sagging. The benchmark West Texas Intermediate was down 3% at $47.05.
Open
US shares were making headway at the off as Wall Street joined in the global rally.
The Dow Jones rose 0.5% to 18,620,while the S&P500 added 0.48% to stand at 2,193. The tech heavy Nasdaq exchange gained 0.57% to 5,274.
In London, at the time of writing, FTSE100 is up 0.77% to 6,879.
The German DAX meanwhile is up 1.10% to 10,609.
Crude prices were under pressure though withm US crude tanking 3.52% to US$46.81 a barrel.
A significant mover was consumer electronics retailer Best Buy (NYSE:BBY), up over 16% in New York to US$38.05 as it unveiled a good rise in quarterly comparable-stores sales.
The largest US consumer electronics retailer also forecast revenue of between $8.8 billion and $8.9 billion and a profit of 43-47 cents per share for the third quarter.
US shares are set to continue north on Tuesday after a mixed finish on Monday, and as investors look to the Jackson hole meeting at the weekend.
Yesterday, stocks finished mixed as traders positioned themselves for a possible Fed rate hike and US two-year Treasuries ramped up yields in expectation.
The S&P 500 market bellwether was down 0.06% to 2182, narrowing the gap into the close but not enough to erase losses.
The Dow Jones closed down around 23 at 18,529, and the Nadsaq added over six points to stand at 5,224.6.
Today in futures, the mood is more buoyant. The Dow Jones futures are up 36; the Nasdaq is up 11 and the broader based S&P500 benchmark is up over four points.
Oil is down 0.84% to US$47 a barrel and gold is up 0.04% to US$1,344 an ounce.
In corporate news, Best Buy Co Inc (NYSE: BBY) flew up 15% in pre-market deals after the electronics retailer reported second-quarter results to end July that beat expectations.
The symposium of Central Bankers begins on Thursday and Janet Yellen speaks on Friday. Keenly awaited is any comment she may make on interest rate rises in the US this year.