All major stock market indexes closed sharply higher Tuesday, propelled by bullish earnings and economic news. Netflix, Facebook-parent Meta and Google-parent Alphabet led the way among blue chip stocks.
The Nasdaq composite led the major indexes, gaining 3.1%. The S&P 500 rose 2.8% and the Dow Jones Industrial Average gained 2.4%. Small caps also outperformed as the Russell 2000 was up 3.5%. The Innovator IBD 50 ETF rose 1.6%.
Volume rose on the Nasdaq and the NYSE compared to the same time on Monday, according to preliminary data.
Housing starts and building permits, released early Tuesday, were a bit lower than the Econoday estimates. Still, they point to a weakening economy and lower forecast for the U.S. housing sector in the second half of the year.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31824.71 | +752.10 | +2.42 |
| S&P 500 | (0S&P5) | 3936.14 | +105.29 | +2.75 |
| Nasdaq | (0NDQC ) | 11713.15 | +353.10 | +3.11 |
| Russell 2000 | 178.69 | +6.09 | +3.53 | |
| IBD 50 | 27.28 | +0.43 | +1.60 | |
Last Update: 4:30 PM ET 7/19/2022 |
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Housing starts were 1.559 million. at a seasonally adjusted and annualized rate in June, below the 1.588 million consensus. June starts were down 2% from May's level of 1.591 million. Building permits for new construction dipped 0.6% to 1.685 million annualized, a little below the 1.695 million consensus.
Housing May Dampen Second-Half GDP
"Starts and permits fell in the second quarter from the first, but still rose from a year earlier," said Bill Adams, Chief Economist for Comerica Bank. "Construction is shifting rapidly to more multifamily and less single family in reaction to surging interest rates. Residential investment will be a headwind to GDP growth in the second half of 2022."
The yield on the 10-year Treasury note rose 3 basis points to 3.02%.
The S&P 500 sectors were all positive. Consumer discretionary, industrials and energy shone the brightest. Utilities and consumer staples lagged, but still rose.
Halliburton shares rose 1.9% after the oil services company beat earnings estimates. The Houston-based company saw its EPS grow 88% in the second quarter.
Dow Jones stock Johnson & Johnson shares fell 1.7% after the firm reported quarterly results that beat analysts' expectations, thanks to strength at its pharmaceuticals unit. However, the Dow giant cut its full-year adjusted profit forecast due to a stronger dollar.
Stock Market Is Bullish On Mixed Earnings
Johnson & Johnson earned $2.59 per share, beating estimates of $2.54 per share. Meanwhile, the firm lowered guidance for the year to an adjusted profit of $10 to $10.10 per share, compared with its prior forecast of $10.15 to $10.35.
Lockheed Martin shares gained 0.5%, erasing earlier losses after the firm announced it missed both earnings and sales estimates for its second quarter, while slashing guidance. The defense contractor reported earnings of $1.16 per share vs. views for $1.88. Revenue fell 9% to $15.4 billion.
IBM shares plunged more than 5% Tuesday after it reported second-quarter results that beat estimates, but with a forecast on free cash-flow that fell short. IBM said it now expects $10 billion in free cash flow in 2022, down from its previous guidance of $10 billion to $10.5 billion. The shares are breaking through their 50- and 200-day lines and well below their sell zone from a peak of 152 last June.
Netflix is trading higher by 8% in Tuesday's post-market after reporting lower-than-expected Q2 subscriber losses. The stock recently reclaimed support at its 50-day line. After the April earnings report, shares of Netflix plummeted over 35%.
Market Rally Breaks Key Resistance; Netflix Jumps On Subscribers
Stocks Stage Breakouts
A trio of stocks managed to pass buy points amid the bullish action. Marten Transport, Digi International and Gaming and Leisure Properties all attempted breakouts.
Shares of computer networking firm Digi broke out from a cup base with a 26.13 buy point early Tuesday. The breakout occurred in lighter volume but the stock's relative strength line hit a new high on the weekly chart. According to IBD Ratings, this stock looks strong, with a 94 EPS Rating, a 97 Composite and a 97 RS Rating.
Cross Country Healthcare, a medical staffing company, had another strong day, up 3.5% in heavy volume. The stock is in a long cup base and is approaching its 30.50 buy point. It has a strong relative strength line.
Twitter shares gained 2.7% Tuesday after the Delaware Court of Chancery dealt a blow to Tesla CEO Elon Musk. The court agreed to let Twitter expedite its lawsuit against the billionaire. The case is now expected to go to trial in October.
Tesla shares gained 2% Tuesday, in advance of its earnings release tomorrow.
Follow Michael Molinski on Twitter @IMmolinski
