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.
Apple Inc.(AAPL) achieved an all-time split-adjusted closing
high, while 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 9.86 points, or 0.5%, to close at
1,981.60, while the Dow industrials(DJI) rose 80.85 points, or
0.5%, to end at 16,919.59. The S&P 500 stands 0.3% off its July
24 record close at 1,987.98, recovering from its drop in late July
and early August.
The Nasdaq Composite (RIXF) advanced 19.20 points, or 0.4%, to
finish at 4,527.51. The tech-laden index scored its highest close
since March 31, 2000, for the second day in a row, and it's on a
five-day winning streak.
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: The rest of the week "is going to
be about the FOMC (Federal Open Market Committee) minutes and
Jackson Hole conference," said Wouter Sturkenboom, strategist at
Russell Investments in London, in emailed comments.
"On both counts, we and the market expect the prevailing dovish
stance to hold, providing upside momentum for markets," Sturkenboom
said. But he added that owing to valuation concerns, his firm
remains neutral on U.S. stocks.
The FOMC minutes will 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 5.6% to a record
close, 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 8.7% 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 rose 1.4% to finish at $100.53, topping its prior
post-split record close of $100.30 achieved on Sept. 19, 2012. The
tech giant's record intraday high of $100.72 came on Sept. 21,
2012. (Read more: 7 reasons to think different about this product
cycle for Apple
http://www.marketwatch.com/story/7-reasons-why-this-product-cycle-will-be-different-for-apple-2014-08-19.)
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) lost ground.
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