U.S. stock indexes rose on Tuesday, with technology pacing the gains, after investor Carl Icahn touted his large position in Apple Inc.
Apple AAPL +4.75% jumped 4.8% after Icahn revealed his “large position” in the stock and amid reports that the consumer-technology company will unveil a new iPhone on Sept. 10.
“When you have a market leader, a still widely held stock being referenced by one of the most widely known and respected investors, Carl Icahn, people do want to play follow the leader,” said Robert Pavlik, chief market strategist at Banyan Partners.
After an 84-point rise and 77-point slide, the Dow Jones Industrial Average DJIA +0.20% ended at 15,451.01, up 31.33 points, or 0.2%. Hewlett-Packard Co. HPQ +2.09% paced blue-chip gains, up 2.1%, after being placed on Citigroup Inc.’s focus list.
The S&P 500 index SPX +0.28% rose 4.69 points, or 0.3%, to 1,694.16, with technology and financials the best performing of its 10 major sectors. Rafferty Capital Markets analyst Dick Bove told CNBC on Tuesday that the banking sector is on track for record profits this year.
Shares of US Airways Group Inc. LCC -13.07% declined 13% after the U.S. Justice Department filed a lawsuit challenging the airline’s merger with AMR Corp. AAMRQ -45.44% , the parent of American Airlines.
J.C. Penney Co. JCP -3.72% retreated 3.7% after activist investor Bill Ackman resigned from the retailer’s board, ending efforts to oust CEO Mike Ullman.
Yum Brands Inc. YUM -2.01% declined 2% a day after the operator of fast-food chains KFC and Taco Bell said sales in China fell last month.
Eli Lilly & Co. LLY +2.61% rallied 2.6% after the drug manufacturer said its potential treatment for lung cancer yielded positive initial results in a late-stage study.
The Nasdaq Composite COMP +0.39% gained 14.49 points, or 0.4%, to 3,684.44.
For every two shares rising, roughly three fell on the New York Stock Exchange, where 618 million shares traded.
Composite volume topped 3 billion.
Stocks rose to session highs after Dennis Lockhart, president of the Atlanta Fed Bank, on Tuesday afternoon said the economy’s uneven performance likely means the Fed won’t commit to a “full phase-out” of its $85 billion in monthly bond buys.
“From an earnings standpoint, we’re strong enough to support a taper in September. And the jobs picture is improving, so I’ve been in the camp that it’s coming, regardless whether it’s September or December,” said Nick Raich, CEO at the Earnings Scout.
The yield on the 10-year Treasury note 10_YEAR -0.51% used to determine rates on loans including mortgages rose 10 basis points to 2.719%. That hit home builders, with PulteGroup Inc. PHM -2.29% down 2.3%, D.R. Horton Inc. DHI -1.49% off 1.5% and Lennar Corp. LEN -2.63% off 2.6%.
“Home builders got grossly overvalued. When the Fed taper comes, and interest rates rise, is the housing recovery strong enough to support rising rates? The Fed’s caught between a rock and a hard place,” said Raich.
A report released by the Commerce Department ahead of the open showed retail sales rose 0.2% last month after a 0.6% gain in June that was larger than initially estimated. Retail sales excluding cars, gasoline and building materials climbed at their fastest pace in seven months.
“Consumers are still spending, although limited income growth appears to also be holding spending increases in check,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, wrote in emailed research.
The dollar DXY +0.02% gained against the currencies of major U.S. trading partners, including the yen USDJPY -0.0023% and the euro EURUSD +0.0318% .
Halting a four-session rise, the price of gold futures GCZ3 +0.03% fell $13.70, or 1%, to end at $1,320.50 an ounce. Crude oil for September delivery CLU3 -0.23% climbed 72 cents, or 0.7%, to $106.83 a barrel.
Source: Marketwatch
