Stocks took off on Tuesday for the second straight day of strong gains.
All three major US stock indexes finished well into the green after a slew of strong earnings and solid US economic data. The Nasdaq composite topped the 6,000 mark for the first time in its history, while the Dow pushed back above 21,000.
On the political front, it appears Congress is getting closer to a bill to avoid a government shutdown and details of President Donald Trump’s tax plan are coming into view.
We’ve got all the headlines, but first, the scoreboard:
- Dow: 21,103.78, +247.05, (+1.19%)
- S&P 500: 2,390.19, +14.56, (+0.61%)
- Nasdaq: 6,025.53, +41.41, (+0.70%)
- US 10-year bond yield: 2.327%, (+0.054)
- WTI crude oil: $US49.64, +0.41, (+0.83%)
- The US announced a tariff against some Canadian lumber. Commerce Secretary Wilbur Ross announced the tariff would be on softwood lumber that is used primarily in building homes. Following the news, the Canadian dollar weakened and stocks of homebuilders slipped.
- Caterpillar reported dynamite earnings. The global industrial equipment manufacturer announced adjusted earnings of $US1.28 a share, crushing analyst expectations of $US0.62 a share. The company did, however, warn that “geopolitical and market uncertainty” could weigh on business.
- McDonald’s earnings beat expectations. US sales at the fast food giant increased by 1.7% and global sales increased by 4% for the quarter, higher than analysts’ expectations. The company reported adjusted earnings of $US1.47 a share, beating the forecast for $US1.34.
- Trump appears to be backing down on his demand for border wall funding in the new spending bill. Trump reportedly told conservative media members at the White House that he could wait until September to fund the building of a wall instead of including it in the short-term funding bill needed to avoid a government shutdown needed on Friday.
- Tyson Food announced it was buying pre-packaged food maker Advance Pierre for $US3.2 billion. Tyson will pay $US40.25 per share in cash for AdvancePierre. That’s almost double the initial public offering price for AdvancePierre, which was taken public by Oaktree Capital at $US21 per share in September 2016.
- David Einhorn is still bearish on Tesla. Einhorn’s Greenlight Capital posted returns of 1.3% for the first quarter, below the S&P 500’s return of 6.1%. The hedge fund manager said “it was a difficult quarter to be short the bubble basket” and pointed to his short of Tesla was a particular problem.
- All 15 members of Wells Fargo’s board of directors were re-elected despite protests from shareholders. One shareholder had to be removed from the meeting, where board members faced pushback due to the recent fake accounts scandal at the bank.
- New homes sales jumped. Sales of new single-family houses rose 5.8% at a seasonally adjusted annual rate of 621,000, the highest since last August. Economists had forecast that new home sales fell by 1.4% at a seasonally adjusted annual rate of 584,000
- Consumer confidence came in slightly below expectations. The index from the Conference Board came in at 120.3, lower than economists’ expectation of 122.5. It is also a decline from last month’s 16-year record reading of 125.6.
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