Nasdaq Climbs To New Record Closing High As Bitcoin Recovers
After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Tuesday. With the upward move on the day, the tech-heavy Nasdaq reached a new record closing high.
The major averages pulled back off their highs going into the close but remained in positive territory. The Dow rose 68.61 points or 0.2 percent to 33,945.58, the Nasdaq advanced 111.79 points or 0.8 percent to 14,253.27 and the S&P 500 climbed 21.65 points or 0.5 percent to 4,284.44.
The strength that emerged on Wall Street was partly attributed to a significant rebound by the value of bitcoin.
Bitcoin turned higher over the course of the trading day after the cryptocurrency tumbled below $30,000 earlier in the day.
The higher close by stocks also came as Federal Reserve Chair Jerome Powell continued to downplay the risks of inflation during testimony before the House Select Subcommittee on the Coronavirus Crisis.
Powell acknowledged inflation has increased notably in recent months but reiterated the view that the jump is due to “transitory” factors and predicted inflation would drop back toward the Fed’s longer-run goal of 2 percent price growth.
The Fed chief noted the economy has shown sustained improvement since he last appeared before the committee, citing widespread Covid-19 vaccinations as well as unprecedented monetary and fiscal policy actions.
However, he also warned the coronavirus pandemic continues to pose risks to the economic outlook, pointing to the slowing pace of vaccinations and new strains of the virus.
Powell stressed that the Fed will do “everything we can to support the economy for as long as it takes to complete the recovery.”
On the U.S. economic front, the National Association of Realtors released a report showing existing home sales extended a recent pullback in May but fell by less than economists had expected.
NAR said existing home sales slid by 0.9 percent to an annual rate of 5.80 million in May after tumbling by 2.7 percent to a rate of 5.85 million in April. Economists had expected existing home sales to slump by 2.2 percent to a rate of 5.72 million.
Existing home sales have plummeted by 12.9 percent since January but are still up by 44.6 percent compared to May of 2020.
Retail stocks showed a strong move to the upside on the day, driving the Dow Jones U.S. Retail Index up by 1.4 percent to its best closing level in almost two months.
Notable strength also emerged among software stocks, as reflected by the 1.1 percent gain posted by the Dow Jones U.S. Software Index.
Most of the other major sectors showed only modest moves on the day, although some weakness was visible among airline stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index soared by 3.1 percent, while China’s Shanghai Composite Index climbed by 0.8 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the German DAX Index edged up by 0.2 percent and the French CAC 40 Index inched up by 0.1 percent.
In the bond market, treasuries moved modestly higher after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.472 percent after reaching a high of 1.509 percent.
On Wednesday, traders are likely to keep an eye on the Commerce Department’s report on new home sales in the month of May.
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