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S&P closes at more than two-month high on retail, energy lift

Economy Nov 22, 2022 06:41PM ET
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© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 21, 2022. REUTERS/Brendan McDermid
 
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By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks rallied on Tuesday, with the S&P 500 closing at its highest level in 2-1/2 months, as a sales forecast by Best Buy dampened concerns high inflation would lead to a dismal holiday shopping season while a bounce in oil prices helped lift energy shares.

Best Buy Co Inc (NYSE:BBY) shot up 12.78% as the best performing stock on the S&P 500 index, after the retailer forecast a smaller drop in annual sales than previously announced and expressed confidence a ramp up in deals and discounts will entice more customers.

The gains in Best Buy helped boost the S&P 500 retail index 1.21%.

In contrast, Dollar Tree Inc (NASDAQ:DLTR) tumbled 7.79% as the worst performing S&P 500 component, which also capped gains for the retail index as the discount retailer cut its annual profit forecast for the second time.

"If you take the continuum of income and consumers out there, the upper half of that is relatively inelastic to some costs going up to some extent or another where the bottom half is going to be more sensitive," said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.

"So the Dollar Trees of the world really don’t have much ability to pass through those costs so they are going to get hit pretty bad."

The Dow Jones Industrial Average rose 397.82 points, or 1.18%, to 34,098.1, the S&P 500 gained 53.64 points, or 1.36%, to 4,003.58 and the Nasdaq Composite added 149.90 points, or 1.36%, to 11,174.41.

The S&P 500 closed at its highest level since Sept. 12.

Also providing support was the energy sector, which climbed 3.18% after two sessions of declines as Saudi Arabia said OPEC+ was sticking with outputs cuts, shooting down a report on Monday that said the alliance was considering increasing output which sent crude prices sharply lower.

As investors continue to try and gauge the path of Federal Reserve rate hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that lowering inflation remains critical for the central bank, a day after supporting a smaller rate hike in December. Kansas City President Esther George said the central bank may need to boost interest rates to a higher level and hold them there for longer in order to temper consumer demand and cool inflation.

Investors were also awaiting remarks by St. Louis Fed Reserve President James Bullard on Tuesday ahead of the minutes from the Fed's November meeting scheduled for Wednesday.

Volume was light for the session and is likely to dwindle heading into the Thanksgiving holiday on Thursday, with the U.S. stock market open for a half-session on Friday.

Volume on U.S. exchanges was 9.45 billion shares, compared with the 11.75 billion average for the full session over the last 20 trading days.

Dow component Walgreens Boots Alliance (NASDAQ:WBA) Inc rose 2.96% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push.

Manchester United shares jumped late in the session after Sky News reported the Glazer family, which owns the football club, was exploring financial options that could include an outright sale, and closed 14.66% higher.

Agilent Technologies Inc (NYSE:A) climbed 8.08% after the application-focused solutions company posted upbeat fourth-quarter revenue.

Declines in the dollar and U.S. Treasury yields also helped support risk appetite.

Advancing issues outnumbered declining ones on the NYSE by a 3.40-to-1 ratio; on Nasdaq, a 1.56-to-1 ratio favored advancers.

The S&P 500 posted 24 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 108 new highs and 224 new lows.

S&P closes at more than two-month high on retail, energy lift
 

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Comments (14)
JIM VETTER
JIM VETTER Nov 22, 2022 6:49PM ET
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It's all smoke and mirrors, just like hope and praying. The numbers are retrospective and ASSUMING the future sales will be lower, just not as much. Read that.. slower sales, not better. The bubble will burst in 2023. It has to to get us back on track. Stocks still way over-valued per historical ratios
Kerry Ditto
Kerry Ditto Nov 22, 2022 4:53PM ET
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people have to throw money away in buying lottery tickets. it's the only thing for some to keep hope in life.
Luke Knoep
Luke Knoep Nov 22, 2022 4:53PM ET
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Yes. I believe Dow will rise again tomorrow too.
Kerry Ditto
Kerry Ditto Nov 22, 2022 4:45PM ET
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stock market to be avoided for several decades
Kerry Ditto
Kerry Ditto Nov 22, 2022 4:43PM ET
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people have to sell stocks to feed children during holiday season, unthanking s&p 500, ytd, -16%. horrible, depressing, dark hollowdays.
First Last
First Last Nov 22, 2022 4:43PM ET
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"people have to sell stocks to feed children" --  Such people shouldn't be in stocks
Kerry Ditto
Kerry Ditto Nov 22, 2022 4:32PM ET
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7%~10% unemployment rate looks coming soon.
Kerry Ditto
Kerry Ditto Nov 22, 2022 4:26PM ET
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stagflation is underway. holiday sales would be horrible.
Elvis Durant
Elvis Durant Nov 22, 2022 2:58PM ET
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fake news. world cup mandate.....
Dave Jones
Dave Jones Nov 22, 2022 2:53PM ET
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that's like saying wall street climbs because.... it's going up.
First Last
First Last Nov 22, 2022 2:53PM ET
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Oftentimes, we should go bullish just because market is going up.
JIM VETTER
JIM VETTER Nov 22, 2022 2:53PM ET
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First Last until it doesn't
First Last
First Last Nov 22, 2022 2:53PM ET
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JIM VETTER   I said "oftentimes"
First Last
First Last Nov 22, 2022 2:53PM ET
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JIM VETTER   ALWAYS have risk management.
gene morris
gene morris Nov 22, 2022 2:46PM ET
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wall St climbs on Bull *****t
JIM VETTER
JIM VETTER Nov 22, 2022 2:22PM ET
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Soooo... forget the revised guidance of many companies, forget the ongoing war in Ukraine still causing supply issues, forget the highest inflation (still) in 40 years, forget the impending rail strike, forget the massively inverted bond yields, forget the corporate lay offs announced.... Best Buy is doing well!! Happy days are here again!! What a crock. The coming bubble burst is going to be massive. Just wait for the crooked big boys to short the markets, then look out below!
First Last
First Last Nov 22, 2022 2:22PM ET
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"forget the ongoing war in Ukraine" --  Russian aggression is doing badly there and that's bullish.
First Last
First Last Nov 22, 2022 2:22PM ET
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"inverted bond yields" --  About as inverted as it was in mid 2019, way less inverted than around 1980 or early 1970s.
 
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