By Yasin Ebrahim
Investing.com -- The S&P 500 rose Tuesday, remaining on course to notch its best January since 2019 as investors weighed up a slew of mostly better-than-expected results just as the Federal Reserve kicked of its two-day meeting.
The S&P 500 rose 1% taking its gains to more than 5% for the month. The Dow Jones Industrial Average gained 0.66%, or 224 points, and the Nasdaq Composite was up 1.7%.
Consumer discretionary stocks led the market higher, led by a General-Motors-inspired surge in automakers.
General Motors (NYSE:GM) rallied more than 7% after its fourth-quarter results topped Wall Street estimates and the automaker delivered annual guidance that was less bad than feared.
“We believe this quarter from GM was a statement to the Street expressing that demand worries and supply shortages are a thing of the past and to shift focus on the massive opportunity ahead as GM continues chipping away at its transformational story,” Wedbush said in a note.
Consumer stocks were also pushed higher by a rally in PulteGroup (NYSE:PHM) to new 52-week highs after the homebuilder delivered better-than-expected fourth quarter earnings.
Tech, meanwhile, rebounded from its soft start to the week, as investors look to further results from big tech. Meta Platforms (NASDAQ:META) is set to report results on Wednesday. While Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Amazon.com (NASDAQ:AMZN) on Thursday.
In industrials, investors weighed up better-than-expected results from United Parcel Service Inc (NYSE:UPS) and Smith AO Corporation (NYSE:AOS) against a quarterly earnings miss from Caterpillar .
Caterpillar (NYSE:CAT) fell more than 3% after the heavy equipment maker’s fourth-quarter earnings fell short of Wall Street estimates, pressured by a strong dollar and higher costs during the quarter.
McDonald’s Corporation (NYSE:MCD), meanwhile, delivered quarterly results that beat on both the top and bottom lines, but worries over margins weighed on the stock after the fast-food giant said cost pressures were expected to persist in 2023.
In other news, PayPal (NASDAQ:PYPL) announced plans to lay off 2,000 employees, about 7% of its workforce as the payments company prepares for a “challenging macroeconomic environment.”
The strong day of gains on Wall Street comes just as the Fed kicked off its two-day meeting, which is expected to culminate in a decision to slow the pace of rate hikes to 25 basis points.
In economic news, consumer confidence fell in January to a reading of 107.1, as consumers grew less upbeat about job prospects and expected business conditions to soften in the near term.