By DAMIAN J. TROISE and ALEX VEIGA
Another hectic day of trading on Wall Street ended Tuesday with a mostly higher finish for stocks adding to the market’s recent streak of gains.
The S&P 500 rose 0.2%, its third straight gain. The Dow Jones Industrial Average rose 0.7%, extending its winning streak to a fifth day. The Nasdaq fell 0.2%.
Bond yields gained ground. The 10-year Treasury yield rose to 2.81% from 2.79% late Monday.
The latest market moves came as traders cautiously reviewed encouraging financial results from major retailers.
Walmart rose 5.1% after the nation’s largest retailer reported strong results that easily beat analysts’ forecasts. Home Depot rose 4.1% after also reporting better-than-expected results. Earnings at both companies did much of the heavy lifting for the Dow.
Technology, healthcare and energy stocks fell, capping the broader market’s advance. Broadcom fell 1.3%, Moderna fell 5% for the biggest drop in the S&P 500 and Marathon Oil fell 1.1%.
Retailers, consumer goods manufacturers and banks posted solid gains.
Overall, the S&P 500 rose 8.06 points to 4,305.20. The Dow gained 239.57 points to 34,152.01. The Nasdaq fell 25.50 points to 13,102.55.
Shares of smaller companies fell. The Russell 2000 fell 0.82 points, or less than 0.1%, to 2,020.53.
US crude oil prices fell 3.2%. European markets ended broadly higher and Asian markets closed mixed overnight.
Stocks had their best month in a year and a half in July and the winning streak has continued into August partly on hopes that inflation will ease. The government’s latest consumer price report showed inflation essentially stagnated from June to July.
Still, trading has been choppy, with major indexes swinging between gains and losses throughout each day.
The choppy trading reflects at least in part an increase in “short buyers,” or investors stepping in to buy stocks that have traded lower, said Randy Frederick, managing director of trading and derivatives at Charles Schwab.
“Dive buyers were only absent in the first half of the year, and whenever they did step in they got hit every time,” he said. “That has changed now.”
Frederick points to the momentum in the market right now.
“Clearly the easiest direction is up right now, but that doesn’t mean we won’t have another pullback,” he said.
The latest results from retailers show that spending remains strong, even as consumers face the highest inflation in 40 years. Wall Street has been concerned that higher prices for everything from food to clothing could dampen the economy’s main driver of growth, consumer spending. Investors will get more updates on the retail sector this week when Target reports its results on Wednesday.
The Commerce Department releases its retail sales report for July on Wednesday. Economists polled by FactSet expect modest growth of 0.2% from June, when sales rose 1%.
Retail reports are capping off the latest round of business earnings, which have been closely watched by investors trying to gauge the impact of inflation on businesses and consumers, while trying to gauge how the Federal Reserve will react. The central bank is raising interest rates in an effort to slow economic growth and curb inflation, though it risks slowing too hard and tipping the economy into recession.
Investors are looking for signs that inflation is peaking or cooling in hopes that the Fed may ease its aggressive rate-hiking policy. The central bank in July raised its benchmark interest rate by three-quarters of a point for the second time in a row. On Wednesday, Wall Street will get more details on the process behind that decision when the Fed releases the minutes of that meeting.
Investors currently expect a half-point hike at the Fed’s next meeting in August, according to CME’s FedWatch tool.
