U.S. stocks rallied on Tuesday in light trading volume 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 (BBY.N) jumped 10.28% as the best performer on the S&P 500 (.SPX) 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 (.SPXRT) index 0.81%.
“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 Tree’s 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 (.DJI) rose 323.64 points, or 0.96%, to 34,023.92, the S&P 500 (.SPX) gained 39.58 points, or 1.00%, to 3,989.52 and the Nasdaq Composite (.IXIC) added 86.30 points, or 0.78%, to 11,110.81.
Also providing support was the energy sector, which jumped 3.04% 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.
Volume was light this week and likely to dwindle heading into the Thanksgiving holiday on Thursday, with the U.S. stock market open for a half-session on Friday.
Investors will keep a watch on remarks by St. Louis Fed Reserve President James Bullard and Kansas City President Esther George later on Tuesday, with minutes from the Fed’s November meeting scheduled for Wednesday.
Declines in the dollar and the U.S. Treasury yields aklsalsoped support risk appetite.
Agilent Technologies Inc (A.N) jumped 7.29% after the application-focused solutions company posted upbeat fourth-quarter revenue.
Advancing issues outnumbered declining ones on the NYSE by a 2.86-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers.
The S&P 500 posted 20 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 75 new highs and 190 new lows.