by Sinéad Carew, Sruthi Shankar and Johann M Cherian
(Reuters) – The New York Stock Exchange rebounded sharply on Tuesday, buoyed by strong indicators that reassured investors about the health of the U.S. economy despite the prospect of another rate hike from the Federal Reserve in July .
The digital giants particularly contributed to the rise of the day.
After six consecutive sessions of decline, the Dow Jones index gained 0.63%, or 212.03 points, to 33,926.74 points.
The broader S&P-500 rose 49.59 points, or 1.15%, to 4,378.41 after falling in five of the previous six sessions.
The tech-heavy Nasdaq Composite advanced 219.9 points (1.65%) to 13,555.67 points and is heading for its best first half in 40 years.
After the negative sequence of the past week, fueled by the aggressive speech of the chairman of the Fed, Jerome Powell, the trend was supported by a salvo of favorable macroeconomic indicators in the United States: in May, new orders in goods of unexpectedly increased while new home sales soared; and in June, US consumer confidence hit a near year-and-a-half high.
Beyond these encouraging data, Rhys Williams, chief strategist at Spouting Rock Asset Management, evokes economic factors to explain the rise of the day.
“We had a bad week last week in the equity markets and a bad day on Monday. It’s just a turnaround,” he said. “There may also be a bit of an end-of-term trompe-l’oeil phenomenon.”
The positive signals for the economic situation benefited the Dow sector index of Transport (+2.7%) and the Russell 2000 index of small caps (+1.5%).
The Philadelphia index of the real estate sector (+2.99%) for its part reached a record in session.
The heavyweights of the rating carried the momentum of the day, such as Microsoft (+ 1.8%) or Apple (+ 1.5%). Meta Platforms took 3.1% after a price target increase by Citigroup.
Tesla gained 3.8% as its charging system looks set to become the standard for electric vehicles in North America.
Walgreens Boots Alliance, on the other hand, fell 9.3% as the drugstore chain warned of its annual profit due to weaker-than-expected demand for COVID-19 tests and vaccines.
Electric truck maker Lordstown Motors slumped 17.2% after filing for bankruptcy protection on Tuesday and filing for sale after a dispute over a promised investment by Foxconn.
(Written by Sinéad Carew in New York, Sruthi Shankar, Johann M Cherian in Bangalore and Terence Gabriel in New York, Bertrand Boucey)
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