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Aug. 16, 2022, 4:24 p.m. EDT

Dow rises for fifth day to highest close since April as retailer stocks fuel rally

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By Joseph Adinolfi and William Watts

A rally in retailer shares drove the Dow Jones Industrial Average to a fifth day of gains Tuesday, with both the Dow and S&P 500 index closing at their highest levels since late April.

What happened

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.28% closed 239.57 points, or 0.7%, higher at 34,152.01, above the key 34,000 level for the first time since May 4.

  • The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.12% climbed 8.06 points, or 0.2%, at 4,305.20. The index has now risen 17.5% from its mid-June low.

  • The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.54% was down 25.50 points, or 0.2%, at 13,102.55.

Stocks rose Monday also, with the Dow rising 151 points, or 0.5%, while the S&P 500 gained 0.4% and the Nasdaq Composite tacked on 0.6%. The S&P was up more than 17% through Monday from its mid-June low, but remains down 10.4% from its Jan. 3 record close.

What drove markets

After getting off to a wobbly start, U.S. stocks swung higher as a rally in retailer stocks helped lift the Dow and S&P 500 to their highest levels in more than three months.

Strong performances from Walmart /zigman2/quotes/207374728/composite WMT -0.56% and Home Depot Inc. HD helped the Dow lead U.S. stocks higher, with the two retailing giants accounting for more than half of the blue-chip average’s gains.

Wal-Mart gained 5.1% after reporting strong fiscal second-quarter profit and raising its full-year outlook , making it the Dow’s best performer, while Home Depot wasn’t far behind, rising 4.1% after affirming its full-year outlook and reporting profits, sales and same-store sales that all beat expectations.

Their strong earnings reports sparked a broader rally in retail stocks that drove the consumer-staples sector up 2.3%, making it the best performer among the S&P 500’s 11 sectors.

Joe Saluzzi, co-head of equity trading at Themis Trading, pointed out that Wal-Mart and Home Depot were responsible for more than half of the Dow’s gain on Tuesday.

“Any sign that the consumer is still strong is a good thing,” Saluzzi added during a phone interview with MarketWatch. “The market is shaking off a lot of the recessionary concerns and saying ‘well maybe inflation has peaked. Maybe the economy has achieved the soft landing that people were hoping for.'”

Read: This stock-market milestone indicates the S&P 500 could be as much as 16% higher one year from today

Some market watchers, however, cautioned that the market could be getting ahead of itself.

“We would caution investors against chasing this rally. We expect renewed market volatility ahead, and we continue to recommend positioning portfolios for resilience under various scenarios,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

“With inflation still high, we favor value stocks including global energy. And with the economic outlook uncertain, we think investors can consider defensive equity exposure via global healthcare or quality income stocks,” he wrote.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,145.00
-80.61 -0.28%
Volume: 320.97M
Sept. 30, 2022 12:49p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,644.94
+4.47 +0.12%
Volume: 2.22B
Sept. 30, 2022 12:49p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
10,795.34
+57.83 +0.54%
Volume: 2.28B
Sept. 30, 2022 12:49p
loading...
/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 131.51
-0.74 -0.56%
Volume: 2.23M
Sept. 30, 2022 12:49p
P/E Ratio
26.25
Dividend Yield
1.70%
Market Cap
$358.96 billion
Rev. per Employee
$255,576
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