After a tepid but positive trading day Monday, that started with a gap higher from last week, stocks and index ETFs continued the rally on Tuesday, aided by a rebounding Nasdaq and robust economic data.
With much of the market showing gains, the Dow Jones Industrial Average added 117 points or 0.4%, while the S&P 500 advanced 0.9% and the Nasdaq Composite climbed 1.5%, as tech stocks outperformed.
The major stock index ETFs are gaining ground Tuesday along with their underlying benchmarks, with the SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) all advancing.
Tech stocks like Apple and Microsoft are building on gains made Monday, and climbed 1.4% and 1.6%, respectively, while Netflix advanced an even more impressive 3.3% and Facebook traded higher by 2.2% to help boost the ProShares UltraPro QQQ (TQQQ) 5.11% Tuesday. Meanwhile, the banking sector languished, with Citigroup, US Bank, and JP Morgan all showing losses, and the iShares U.S. Regional Banks ETF (IAT) down 1.4%.
Equity markets were lifted following news that China reported its first retail sales gain for 2020. The country’s National Bureau of Statistics said Chinese retail sales climbed 0.5% in August, prompting the Shanghai Composite to finish 0.5% higher on Tuesday.
This places China “on track to return to its pre-virus growth rate before the end of the year,” said Julian Evans-Pritchard, senior China economist at Capital Economics. “Retail sales surpassed 2019 levels for the first time since the COVID-19 outbreak, while investment and output growth continued to strengthen” last month.
Investors were also driven by positive economic data in the U.S., as the Empire State Manufacturing index reached a robust 17 for September, rebounding from a print of 3.7 in August. Economists polled by Dow Jones had only projected the index to come in at 7.