US Stocks Rally on Tuesday 08/14 16:20
U.S. stocks rallied Tuesday as banks, retailers, and smaller companies
NEW YORK (AP) -- U.S. stocks rallied Tuesday as banks, retailers, and
smaller companies jumped. That helped the market recover most of its losses
from the previous two days.
The Turkish lira steadied as officials from Turkey and the U.S. said the
countries are in talks to ease diplomatic tensions, which have resulted in high
tariffs on Turkish steel and aluminum. Stocks in emerging markets like
Argentina, Russia and Brazil jumped.
In the U.S., the biggest gains went to small and mid-size companies, which
do more business domestically compared to the large multinational firms on
indexes like the S&P 500 and the Dow Jones Industrial average. Retailers rose,
thanks in part to strong quarterly reports.
The reduced tensions with Turkey also stopped a rally in bond prices and
sent yields and interest rates higher. That helped banks. Industrial and basic
materials companies also rose Tuesday, but compared to other parts of the
market, they didn't recover as much of their losses.
Invesco Chief Global Market Strategist Kristina Hooper said investors are
shifting money into more U.S.-focused companies in response to the Trump
administration's aggressive handling of its dispute with Turkey, a longtime
member of NATO.
"This is a reminder that the U.S. is a very different country than it was
just a few years ago," she said.
The S&P 500 index climbed 18.03 points, or 0.6 percent, to 2,839.96. The Dow
Jones Industrial Average gained 112.22 points, or 0.4 percent, to 25,299.92.
The Nasdaq composite added 51.19 points, or 0.7 percent, to 7,870.89. The
Russell 2000 index advanced 17.26 points, or 1 percent, to 1,692.58.
The S&P 500 fell a combined 1.1 percent Friday and Monday as investors
worried that Turkey's financial woes would affect other countries.
Many retailers will report their quarterly results this week, a potential
hint about how much money consumers are spending. Tapestry, the parent company
of Coach and Kate Spade, jumped after its fourth-quarter results surpassed
analysts' estimates. The stock surged 12 percent to $53.16.
Auto parts retailer Advance Auto Parts jumped 7.8 percent to $156.13 after
it did better than expected in the second quarter. Competitors AutoZone and
O'Reilly Automotive climbed as well.
Smaller companies made outsize gains. Footwear maker Wolverine World Wide
gained 2.4 percent to $38.39 and watchmaker Fossil rose 4.8 percent to $25.68.
Among midsize companies, Boston Beer picked up 3.9 percent to $291.30 and RV
maker Thor Industries rose 2.6 percent to $97.06.
Global markets fell Friday and Monday on concern that Turkey's currency
turmoil could spread to banks in other countries and affect the world economy.
The Argentine peso and India's rupee hit record lows against the dollar. Those
jitters eased later Tuesday.
Economists say Turkey's central bank still needs to raise interest rates
significantly to strengthen its currency. President Recep Tayyip Erdogan has
ruled out that step.
Hooper, of Invesco, said it's common for stocks to fall across emerging
markets when one country is in trouble, but that reaction isn't necessarily
"What we're seeing in emerging markets today is a repeat of what we've seen
crisis after crisis for the last few decades," Hooper said. "We can't treat all
emerging markets the same way."
She said Argentina, like Turkey, is dealing with a plunging currency and
political turmoil. But most of Turkey's problems are specific to that country
and other emerging markets like Mexico are likely to recover.
Bond prices moved lower. The yield on the 10-year Treasury note rose to 2.90
percent from 2.88 percent.
Cigna and Express Scripts both rose after billionaire investor Carl Icahn
said he's ending his campaign to block the deal. He had urged Cigna
shareholders to vote against the $52 billion acquisition of Express Scripts and
said the price was far too high.
Health insurer Cigna added 1.9 percent to $185.30 and Express Scripts, a
pharmacy benefits manager, picked up 2.4 percent to $86.
Consumer credit company Synchrony Financial rose 2.8 percent to $30.01 after
it said it extended a contract to manage credit card programs for home
improvement retailer Lowe's. Lowe's gained 1.3 percent to $98.40.
Benchmark U.S. crude slipped 0.2 percent to $67.04 per barrel in New York.
Brent crude, used to price international oils, dipped 0.2 percent to $72.46 per
barrel in London.
Gold added 0.2 percent to $1,200.70 an ounce. Silver rose 0.5 percent to
$15.05 an ounce. Copper fell 1.8 percent to $2.68 a pound following weak
economic reports from China. Growth in factory output, consumer spending and
retail sales in July were slower than expected.
Wholesale gasoline picked up 1 percent to $2.03 a gallon. Heating oil lost
0.4 percent to $2.13 a gallon. Natural gas rose 1 percent to $2.96 per 1,000
The dollar rose to 111.22 yen from 110.69 yen. The euro fell to $1.1339 from
Germany's DAX rose less than 0.1 percent. The CAC 40 in France fell 0.2
percent and Britain's FTSE 100 lost 0.4 percent.
Tokyo's Nikkei 225 added 2.3 percent. Hong Kong's Hang Seng declined 0.7
percent while the Kospi in Seoul advanced 0.5 percent.