U.S. stocks closed higher on Tuesday as investors looked past the tight COVID-19 restrictions being imposed in China and focused on a batch of earnings reports while they await Wednesday’s minutes from the Fed’s last policy meeting. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) climbed 1.2% or 397.82 points to end at 34,098.10 points.
The S&P 500 advanced 1.4% or 53.64 points to close at 4,003.58 points. Energy, materials and tech stocks were the biggest gainers.
The Materials Select Sector SPDR (XLB) gained 2.3%, while the Energy Select Sector SPDR (XLE) advanced 3.1%. The Technology Select Sector SPDR (XLK) climbed 1.9%. All 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq gained 1.4% or 149.89 points to finish at 11,174.40 points.
The fear-gauge CBOE Volatility Index (VIX) was down 4.79% to 21.29. Advancers outnumbered decliners on the NYSE by a 3.40-to-1 ratio. On Nasdaq, a 1.56-to-1 ratio favored advancing issues. A total of 9.45 billion shares were traded on Tuesday, lower than the last 20-session average of 11.75 billion.
Investors Shift Focus from China’s Covid Situation
Investors have been worrying about the surge in fresh COVID-19 cases in China that has led Beijing to tighten restrictions. Also, China reported its first death from the mainland since May over the weekend, which raised fears among investors that leading stocks to end lower on Monday.
However, investors looked past the tightening Covid policy in China and focused on a batch of mixed earnings from big retailers. China started loosening its COVID restrictions only last week when reports of a surge in fresh cases made investors concerned.
It’s a holiday-shortened week and trading volume is low traditionally. However, markets managed to finish in the green in thin trade, with the S&P 500 recording its best day in more than two months.
The earnings season is nearing its end, with the last batch of retailers reporting their quarterly results. On Wednesday Best Buy Co., Inc. BBY reported impressive earnings results. Best Buy reported third-quarter 2022 earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.03 per share. Shares of Best Buy soared 12.8%. Best Buy carries a Zacks Rank #3 (Hold).
Also, Dollar Tree, Inc. DLTR also reported earnings beat. The company reported third-quarter earnings of $1.20 per share, surpassing the Zacks Consensus Estimate of $1.17 per share. However, the company’s shares declined 7.9% after it cut its annual profit forecast for the second time.
Markets will remain closed on Thursday. No economic data was released on Tuesday.