Tech powers stock rally, ending losing streak: Stock market news today – Yahoo Finance

Stocks made a comeback Tuesday, ending a streak of losing sessions, as investors combed through fresh economic prints showing the economy remains resilient.
Tech stocks led the trading session gains, with the Nasdaq Composite (^IXIC) jumping 1.7%. The S&P 500 (^GSPC) rose 1.1%%, while the Dow Jones Industrial Average (^DJI) traded higher by 0.6%.
The more upbeat tone comes after the Dow on Monday marked its sixth straight day of declines, while a fall for the Nasdaq added up to losses on five of the last six sessions.
Tuesday's morning fresh economic data showed home prices are rebounding, while the newly built homes market remains attractive amid tight resale supply. At the same time, Americans are feeling more confident about the economy even after the Fed's signal to hike interest rates one or two more times this year.
Markets are on the lookout for any factor that could influence the central bank's thinking ahead of its July meeting. In particular, they're watching for signs of resilience as concerns reemerge about recession sparked by the Fed's rate hike campaign.
There could be a fair amount of buying and selling in the markets this week, which marks the last days of the quarter and the first half of 2023, as investors rebalance their asset allocations.
Tech stocks pushed the Nasdaq Composite (^IXIC) to rally 1.6% as Wall Street rebounded Tuesday with a big rally. The S&P 500 (^GSPC) advanced 1.1%, while the Dow Jones Industrial Average (^DJI) added 0.6%.
Big tech stocks have gotten a lot of attention lately for driving this year’s market rally. But another group has been making gains, too.
The limited housing supply is giving homebuilder stocks a lift. The SPDR S&P Homebuilder ETF (XHB) rose as much as 28.2% for the year, outperforming the S&P 500 Index 12.7% gain.
“This is not a one-trick (Tech only) market,” Nicholas Colas, Co-founder of DataTrek Research, wrote in a note to clients on Tuesday. “Moreover, homebuilding stocks remain cheap to the market.”
Homebuilders like Lennar (LEN) and DR Horton (DHI) have expressed enthusiasm in their latest round of earnings due to demand and tight resale inventory, combined with cooling price inflation on building materials.
Meanwhile, other analysts on Wall Street echo a similar sentiment. Citigroup analysts led by Anthony Pettinari wrote in a note to clients on Monday that the housing shortages “may provide a multi-year tailwind for builders.”
An added plus for stocks: the Fed could soon stop hiking rates. Last week, the Federal Reserve Chair Jerome Powell signaled that the central bank expects to hike interest rates one or two more times this year, but at a slower pace.
“And, if the Fed really is near the end of their current tightening cycle, then interest rates should decline in 2024 and beyond and support demand over the longer term,” Colas wrote.
“More than anything, however, the rally in homebuilders shows the 2023 US equity rally is not just about Big Tech. Other pockets of the market are working as well. And they don’t even have above-average valuations,” he added.
BlackRock (BLK) CEO Larry Fink is making a new pledge.
The boss of the world’s largest money manager is now shying away from using the term “ESG,” saying “it’s been misused by the far left and the far right.”
Yahoo Finance’s Alexis Keenan and Ben Werschkul report Fink’s new pledge is a way to distance himself and BlackRock from the debate over ESG investing.
Fink has been one of the corporate veterans that has pushed long-term investors to take actions to prepare for climate change.
“Climate risk is investing risk,” he said in one of these letters. ESG issues ranging from climate change to diversity to board effectiveness “have real and quantifiable financial impacts,” he said. Back in 2021, Fink asked companies “to disclose a plan for how their business model will be compatible with a net-zero economy.”
Fink’s bold comments have landed him critics on both sides of the political aisle, which included the state of Florida yanking $2 billion in investments from BlackRock as punishment for its ESG stance.
Buried in this morning’s reading on consumer confidence was an update on how consumers feel about the stock market.
And while overall consumer confidence hit the highest level since January 2022, expectations for stock prices flipped to positive from negative for the first time since December 2021.
In June, 34.7% of respondents said they expect to see higher stock prices in a year, more than the 30.2% who expect lower stock prices over that period. Some 35.1% of respondents expect prices to be the same in a year.
In an email on Tuesday, strategists at Bespoke Investment Group flagged that this ends a 17-month streak of consumers looking for lower stock prices, the second-longest such streak since 1987. The only time consumers were bearish on stocks for a longer period was around the financial crisis in 2008.
And even more encouraging for market bulls is that while your gut reaction might be to see this as a contrarian indicator of animal spirits suggesting an imminent turn in the market, history does not confirm this view.
“In the year after each of the two nine-month streaks, the S&P 500 rallied 10.9% and 19.0%, respectively, and coming out of the record 18-month streak, the S&P 500 rallied even more,” Bespoke wrote.
So far this year, the Nasdaq is up nearly 30% while the S&P 500 is up almost 14%. Rally on.
Walgreens Boots Alliance (WBA) stock fell nearly 10% on Tuesday as the company warned it expects profits to be lower than initially anticipated amid dwindling demand for Covid-19 vaccines and a weakening consumer spending environment.
Walgreens administered 800,000 Covid-19 vaccines in the most recent quarter, which ended on May 31, an 83% decline from the same period last year.
Citing declining Covid-19 related revenues and a “more cautious macroeconomic forward view,” Walgreens cut its full-year adjusted earnings per share guidance from a range of $4.45-$4.65 to a range of $4.00-$4.05.
“We saw lower-than-expected COVID-related demand,” Walgreens CEO Rosalind Brewer said on the company’s third quarter earnings call on Tuesday. “We had called out COVID as a wildcard heading into the quarter and have unfortunately seen less patient willingness to vaccinate.”
Read more here.
Americans are feeling more confident about the economy.
The Conference Board’s Consumer Confidence Index climbed to 109.7 this month, marking the highest reading since January 2022. It was up from 102.5 in May. Economists polled by Bloomberg expected the index to gain to 104.0.
“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” said Dana Peterson, chief economist at The Conference Board.
“Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.”
Separately, the board’s survey found consumers’ 12-month expectations on inflation fell to 6% from 6.1% last month.
At noon ET, tech stocks pushed the Nasdaq Composite (^IXIC) up 1% during the midday trading session. The S&P 500 (^GSPC) rose 0.7%, while the Dow Jones Industrial Average (^DJI) also traded higher by 0.4%.
Homebuyers flocked to newly built homes in May after finding few options in the resale market.
As Yahoo Finance’s Gabriella Cruz-Martinez reports:
New single-family home sales rose 12.2% in May to an annualized pace of 763,000, up from April’s revised rate of 680,000, according to a report from the Census Bureau. That’s up 20% above May’s pace of 636,000 in 2022.
The uptick in sales — which builders had foreshadowed in their latest earnings calls — provides yet another sign that homebuyers are turning to new homes amid few options in the previously-owned market.
The median sales price of a new home in May was $416,300, while the average sales price reached $487,300.
At the end of the month, there was a seasonally-adjusted estimate of 428,000 new homes for sale in the market, representing about 6.7 months of supply at the current sales rate.
US home prices gained for the third consecutive month, reflecting a potential permanent rebound in home values.
The S&P Corelogic Case-Shiller US National Home Price index rose 0.5% in April from the previous month, according to data released on Tuesday, marking a third monthly gain following seven months of home prices falling.
On a yearly basis, home values declined 0.2% in April, the first drop since April 2012. The index that tracks housing values across the 20 largest metros showed prices in April gained 0.9% on a seasonally adjusted basis over the prior month and fell 1.7% over the same period a year ago. Economists polled by Bloomberg expected a 0.35% gain for the month and 2.6% drop on a yearly basis.
“The U.S. housing market continued to strengthen in April 2023.” Craig J. Lazzara, Managing Director at S&P DJI, wrote in a press release. “Home prices peaked in June 2022, declined until January 2023, and then began to recover.”
Regionally, home prices continue to be “striking.” The worst performers included Seattle (-12.4%) and San Francisco (-11.1%) at the bottom. The Southeast continues as the country’s strongest region, with home values up 3.6%, while the West was down 6.9% and remains the weakest.
Stocks opened higher pointing to a rebound from recent market losses.
The S&P 500 (^GSPC) rose 0.3%, while the Dow Jones Industrial Average (^DJI) traded up around 0.17%. The tech-heavy Nasdaq Composite (^IXIC) was up 0.4%.
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