S&P 500 Hits Intraday Record High As Stocks Rise

S&P 500 Hits Intraday Record High As Stocks Rise
Market News

S&P 500 Hits Intraday Record High As Stocks Rise

Market News

Stocks rose on Tuesday morning and the S&P  500 achieved a fresh record intraday high. The Nasdaq Composite also did well and went on to add to its record closing level from Monday. The upswing was buoyed by a strong batch of earnings results that helped allay fears about firms’ abilities to cope with the fallout of COVID-19. After last week’s profit-taking, Gold (GC=F) rose well, with futures jumping back over $2,000 per ounce.

The second-quarter results of Walmart (WMT) released on Tuesday morning topped the consensus expectations on both sales and profit, with US comparable same-store sales up 9.3%. The US also witnessed an almost two-fold increase in E-commerce. The 97% surge was caused by many consumers turning towards online shopping avenues during the pandemic. The stock did eventually fluctuate in early trading. This happened after company executives said that sales growth was normalizing and decelerating during the current quarter, caused by the waning of the government stimulus to consumers.

Home Depot (HD) exceeded expectations in its second-quarter results, with comparable sales growth of 23.4% in the three-month period more than doubling the 11.4% growth rate expected. With an exponential increase in the number of people working from home, a lot of consumers and professionals alike flocked to the retailer for DIY projects. Sales were also boosted by the housing market activity and home-building picking up during late spring.

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Big tech companies’ shares including Amazon (AMZN) also traded another 1% higher in pre-market trading following a 1% gain during Monday’s regular session. This happened after Needham analysts released a note stating that Amazon shares can go as high as $5000 each. Tesla (TSLA) shares also added to their gains after they jumped more than 11% to a record closing high Monday. That happened after Wedbush analysts had raised their price target on the stock by $100 to $1,900 earlier in the day. Two days before releasing its quarterly results, Nvidia (NVDA) also closed at a record high on Monday.

If equity trading in the past week is anything to go by, there has been a widening breadth in markets, with cyclicals vying for leadership after a months-long run of outperformance among big tech and “stay-at-home” stocks being viewed as more insulated from the negative business impacts of the coronavirus pandemic. However, there are still no convincing signs of a full-fledged rotation. With investors considering ongoing uncertainty around the pandemic, fiscal stimulus prospects and the presidential elections, the financials and energy sectors once again lagged during Tuesday’s session.

Speaking to Yahoo Finance’s The Ticker, Charles Schwab’s Senior Vice President and Chief Investment Strategist, Liz Ann Sonders said, “I think the factors around quality – quality growth, strong balance sheets, positive cash flow, dominance in industries, management team – those factors have been leadership factors across all 11 sectors, and I think that will continue to define leadership in this environment. We’ve seen these multiple phases, and we had that first phase, that recovery phase from mid-May until the middle of June, when there was that hope that we were seeing a strong recovery. And you saw that leadership shift from just the COVID winners out to the more traditionally cyclical areas, and then more recently we seem to have tried that again. We’ve had some fits and starts of tech profit-taking and a move into industrials, financials. But it’s been fleeting so far, and I think the market is sending – and rightly so – a mixed message, an uncertain message about what this next stage in the recovery looks like.”

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