U.S. equities blasted higher on Tuesday amid a dearth of meaningful headlines, as large-cap indices bounced on support from their 50-day moving average. News flow was light in the wake of a recent focus on the Donald Trump White House and its staffing chaos. We’re in a quiet period right now, as investors look ahead to the start of the Jackson Hole symposium later this week, which will feature updates on the path of monetary policy from the Federal Reserve and the European Central Bank.
In the end, the Dow Jones Industrial Average gained 0.9%, the S&P 500 gained 1%, the Nasdaq Composite gained 1.4% and the Russell 2000 gained 1.1%. Treasury bonds were weaker, the dollar was stronger, gold fell 0.4% and oil gained 0.6% in choppy trading ahead of inventory data.
Breadth was positive, with advancers outpacing decliners by a ratio of 2.6 to 1. Volume was light, with NYSE activity at 83% of its 30-day average. Technology stocks led the way with gains of 1.5% while REITs were the laggards, down 0.1%.
In earnings news, DSW Inc. (NYSE:DSW) gained 17.5% after reporting a bottom-line beat with revenues 2% ahead of estimates. Comp-store sales unexpectedly rose 0.6% versus the 2.2% decline expected. Finish Line Inc (NASDAQ:FINL), which got hit by an analyst downgrade on Monday, rebounded 5.8% after Holder Sports Direct International — a U.K.-based sports retailer — disclosed an increase stake in the company.
Fitbit Inc (NYSE:FIT) gained 5.1% after DealReporter said the company could be settling up for a sale. And Macy’s Inc (NYSE:M) announced restructuring of merchandising operations expected to save about $30 million a year.
Click to Enlarge Investors were reportedly excited about increased prospects for Republican tax-cut proposals. Politico reported that top Trump aides and congressional GOP negotiators have made “significant strides” in putting a plan together focusing on items like capping the mortgage-interest deduction, eliminating state/local income tax deductions, and more.
The end result was the single best day for stocks in four months, showing that the pro-growth “Trumpflation” trade is alive and well. It just need the right catalyst.
Market breadth remains a major problem, however, with just 64% of S&P 500 stocks in uptrends. Also, many are pointing to a spooky price analog with the 1987 market crash. Stay frosty.
Check out Serge Berger’s Trade of the Day for Aug. 23.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
Tell us what you think about this article! Drop us an email at email@example.com, chat with us on Twitter at @InvestorPlace or comment on the post on Facebook. Read more about our comments policy here.