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U.S. stocks closed sharply higher on Tuesday in a relief rally amid sentiment that the market has already hit bottom. A Bank of America survey reported that investor mood was in full capitulation and will lead to stocks rallying in the coming weeks. All the three major indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 2.4% or 754.44 points to finish at 31,827.05 points. Twenty-seven components of the 30-stock index ended in the green, one remained unchanged, while two ended in the red.
The S&P 500 soared 2.8% or 105.84 points to end at 3,936.69 points, recording its highest close since June 9.
The Industrials Select Sector SPDR (XLI), The Communication Select Sector SPDR (XLC) and the Energy Select Sector SPDR (XLE) gained 3.6%, 3.6% and 3.1%, respectively. All the 11 sectors of the benchmark index ended in the green.
The tech-heavy Nasdaq advanced 3.1% or 353.10 points to close at 11,713.15 points, marking its highest single-day gain since June 24.
The fear-gauge CBOE Volatility Index (VIX) was down 3.16% to 24.50. Advancers outnumbered decliners on the NYSE by a 4.88-to-1 ratio. On Nasdaq, a 3.44-to-1 ratio favored advancing issues. A total of 10.95 billion shares were traded on Tuesday, lower than the last 20-session average of 11.76 billion.
Bank of America Survey Predicts Upswing
A Bank of America survey of professional investors released on Tuesday highlighted that investor sentiment has worsened to a point that markets may be currently set up for a relief rally. The report says that expectations about global economic growth and corporate earnings have tumbled to the lowest on record, and investor mood is in “full capitualtion.” This, however, signals that markets have hit bottom and the only path ahead is upward.
Investors’ panic may have paved the way to a fantastic buying opportunity, according to the report. The bearishness from the global fund managers who took the survey suggests that the sellers are washed out, and stocks may rise from here.
It was found that the allocation to stocks in portfolios is at its lowest since October 2008, a month after the collapse of Lehman Brothers, and cash holdings are the highest since 2001.
According to BofA’s chief investment strategist Michael Hartnett, “Fundamentals are poor but sentiment says stocks/credit rally in coming weeks.” In the next 12 months, 75% of the participants predict slowing inflation and lower bond yields.
Energy Stocks Rally on Halliburton Q2 Results
On a booming day in Wall Street, good news came in from many companies that reported profit beats. Significant among them was Halliburton Company (HAL - Free Report) , which posted a 41% increase in second-quarter 2022 adjusted profits boosted by high oil prices, despite taking a $344 million hit from winding down its operations in Russia. The oilfield services provider said that spending by international customers was on track to hit mid-teens percentage growth, predicting "multiple years" of increased activity.
HAL posted adjusted earnings of $0.49 per share, beating the Zacks Consensus Estimate of $0.45, and revenues of $5.07 billion, surpassing the estimate of $4.71 billion. The companies’ shares went up by 2.1% and are up 26% year to date.
The U.S. Census Bureau and U.S. Department of Housing and Urban Development jointly announced that privately owned housing starts in June came down to a seasonally adjusted annual rate of 1,559,000 against the Zacks Consensus Estimate of 1,602,000 for the period. This is 2% below the revised May estimate of 1,591,000 and 6.3% below the June 2021 rate of 1,664,000.
Building permits in June came down to a seasonally adjusted annual rate of 1,685,000 against the consensus of 1,683,000. This is 0.6% below the revised May rate of 1,695,000, but is 1.4% above the June 2021 rate of 1,661,000.
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Stock Market News for Jul 20, 2022
U.S. stocks closed sharply higher on Tuesday in a relief rally amid sentiment that the market has already hit bottom. A Bank of America survey reported that investor mood was in full capitulation and will lead to stocks rallying in the coming weeks. All the three major indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 2.4% or 754.44 points to finish at 31,827.05 points. Twenty-seven components of the 30-stock index ended in the green, one remained unchanged, while two ended in the red.
The S&P 500 soared 2.8% or 105.84 points to end at 3,936.69 points, recording its highest close since June 9.
The Industrials Select Sector SPDR (XLI), The Communication Select Sector SPDR (XLC) and the Energy Select Sector SPDR (XLE) gained 3.6%, 3.6% and 3.1%, respectively. All the 11 sectors of the benchmark index ended in the green.
The tech-heavy Nasdaq advanced 3.1% or 353.10 points to close at 11,713.15 points, marking its highest single-day gain since June 24.
The fear-gauge CBOE Volatility Index (VIX) was down 3.16% to 24.50. Advancers outnumbered decliners on the NYSE by a 4.88-to-1 ratio. On Nasdaq, a 3.44-to-1 ratio favored advancing issues. A total of 10.95 billion shares were traded on Tuesday, lower than the last 20-session average of 11.76 billion.
Bank of America Survey Predicts Upswing
A Bank of America survey of professional investors released on Tuesday highlighted that investor sentiment has worsened to a point that markets may be currently set up for a relief rally. The report says that expectations about global economic growth and corporate earnings have tumbled to the lowest on record, and investor mood is in “full capitualtion.” This, however, signals that markets have hit bottom and the only path ahead is upward.
Investors’ panic may have paved the way to a fantastic buying opportunity, according to the report. The bearishness from the global fund managers who took the survey suggests that the sellers are washed out, and stocks may rise from here.
It was found that the allocation to stocks in portfolios is at its lowest since October 2008, a month after the collapse of Lehman Brothers, and cash holdings are the highest since 2001.
According to BofA’s chief investment strategist Michael Hartnett, “Fundamentals are poor but sentiment says stocks/credit rally in coming weeks.” In the next 12 months, 75% of the participants predict slowing inflation and lower bond yields.
Energy Stocks Rally on Halliburton Q2 Results
On a booming day in Wall Street, good news came in from many companies that reported profit beats. Significant among them was Halliburton Company (HAL - Free Report) , which posted a 41% increase in second-quarter 2022 adjusted profits boosted by high oil prices, despite taking a $344 million hit from winding down its operations in Russia. The oilfield services provider said that spending by international customers was on track to hit mid-teens percentage growth, predicting "multiple years" of increased activity.
HAL posted adjusted earnings of $0.49 per share, beating the Zacks Consensus Estimate of $0.45, and revenues of $5.07 billion, surpassing the estimate of $4.71 billion. The companies’ shares went up by 2.1% and are up 26% year to date.
Consequently, shares of companies like Devon Energy Corporation (DVN - Free Report) and Schlumberger Limited (SLB - Free Report) jumped 4.7% and 3.3%, respectively. Schlumberger has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The U.S. Census Bureau and U.S. Department of Housing and Urban Development jointly announced that privately owned housing starts in June came down to a seasonally adjusted annual rate of 1,559,000 against the Zacks Consensus Estimate of 1,602,000 for the period. This is 2% below the revised May estimate of 1,591,000 and 6.3% below the June 2021 rate of 1,664,000.
Building permits in June came down to a seasonally adjusted annual rate of 1,685,000 against the consensus of 1,683,000. This is 0.6% below the revised May rate of 1,695,000, but is 1.4% above the June 2021 rate of 1,661,000.