S&P closes at more than two-month high on retail, energy lift
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[November 23, 2022] By
NEW YORK (Reuters) - U.S. stocks rallied on
Tuesday, with the S&P 500 closing at its highest level in 2-1/2 months,
as a sales forecast by Best Buy dampened concerns high inflation would
lead to a dismal holiday shopping season while a bounce in oil prices
helped lift energy shares.
Best Buy Co Inc shot up 12.78% as the best performing stock on the S&P
500 index, after the retailer forecast a smaller drop in annual sales
than previously announced and expressed confidence a ramp up in deals
and discounts will entice more customers.
The gains in Best Buy helped boost the S&P 500 retail index 1.21%.
In contrast, Dollar Tree Inc tumbled 7.79% as the worst performing S&P
500 component, which also capped gains for the retail index as the
discount retailer cut its annual profit forecast for the second time.
"If you take the continuum of income and consumers out there, the upper
half of that is relatively inelastic to some costs going up to some
extent or another where the bottom half is going to be more sensitive,"
said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.
"So the Dollar Trees of the world really donít have much ability to pass
through those costs so they are going to get hit pretty bad."
The Dow Jones Industrial Average rose 397.82 points, or 1.18%, to
34,098.1, the S&P 500 gained 53.64 points, or 1.36%, to 4,003.58 and the
Nasdaq Composite added 149.90 points, or 1.36%, to 11,174.41.
The S&P 500 closed at its highest level since Sept. 12.
Also providing support was the energy sector, which climbed 3.18% after
two sessions of declines as Saudi Arabia said OPEC+ was sticking with
outputs cuts, shooting down a report on Monday that said the alliance
was considering increasing output which sent crude prices sharply lower.
As investors continue to try and gauge the path of Federal Reserve rate
hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that
lowering inflation remains critical for the central bank, a day after
supporting a smaller rate hike in December. Kansas City President Esther
George said the central bank may need to boost interest rates to a
higher level and hold them there for longer in order to temper consumer
demand and cool inflation.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., November 22,
2022. REUTERS/Brendan McDermid
Investors were also awaiting remarks by St. Louis Fed Reserve
President James Bullard on Tuesday ahead of the minutes from the
Fed's November meeting scheduled for Wednesday.
Volume was light for the session and is likely to dwindle heading
into the Thanksgiving holiday on Thursday, with the U.S. stock
market open for a half-session on Friday.
Volume on U.S. exchanges was 9.45 billion shares, compared with the
11.75 billion average for the full session over the last 20 trading
Dow component Walgreens Boots Alliance Inc rose 2.96% after Cowen &
Co upgraded the drug distributor stock, citing its healthcare
services business push.
Manchester United shares jumped late in the session after Sky News
reported the Glazer family, which owns the football club, was
exploring financial options that could include an outright sale, and
closed 14.66% higher.
Agilent Technologies Inc climbed 8.08% after the application-focused
solutions company posted upbeat fourth-quarter revenue.
Declines in the dollar and U.S. Treasury yields also helped support
Advancing issues outnumbered declining ones on the NYSE by a
3.40-to-1 ratio; on Nasdaq, a 1.56-to-1 ratio favored advancers.
The S&P 500 posted 24 new 52-week highs and 3 new lows; the Nasdaq
Composite recorded 108 new highs and 224 new lows.
(Reporting by Chuck Mikolajczak; editing by Grant McCool)
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