Wall Street Turnaround Tuesday: Retailers Fuel Rebound

Ending its worst stretch in more than two months, the Dow climbed more than 80 points on Tuesday as economic worries eased amid an upbeat outlook from Home Depot and earnings beats from other retailers like Target.

Wall Street also halted a two-day slide, making back nearly half Monday's losses thanks to a production hike from a U.S. automaker that helped traders brush off another lackluster reading on the housing market.

General Motors turned heads after the car company said it would make more vehicles in response to rising demand. GM will increase production by 35% this quarter and 20% in the fourth quarter while adding shifts at two plants and hiring back 1,350 workers.

Today's Markets
The Dow Jones Industrial Average rose 82.60 points, or 0.90%, to 9217.94, the Standard & Poor's 500 added 9.94 points, or 1.01%, to 989.67 and the Nasdaq Composite picked up 25.08 points, or 1.30%, to 1955.92.

For the week:
The Dow is down 103.46, or 1.1 percent.
The S&P is down 14.42, or 1.4 percent.
The Nasdaq is down 29.60, or 1.5 percent.

For the year:
The Dow is up 441.55, or 5.0 percent.
The S&P is up 86.42, or 9.6 percent.
The Nasdaq is up 378.89, or 24.0 percent.

After two days of bearish sentiment and worries about the timing and strength of a possible economic recovery, the bulls reestablished themselves Tuesday, pushing the markets solidly higher and crude oil to its best day in almost three weeks.

“Clearly the tone is a lot better than we had yesterday. Down 180 points yesterday, it looked like all the bears were right,” said NYSE trader Ted Weisberg of Seaport Securities.

Tuesday's solid rally comes after economic fears sent the Dow plummeting 263 points in just two days, its worst slump since June 16. After rallying for four straight weeks, stocks have come under pressure in August as data on retail sales and consumer sentiment have given the bulls pause.
“Investors have been conditioned over the last six months to buy the dip,” said Paul Nolte, director of investments at Hinsdale Associates, who said he is still worried about the economy. “When you look at the economic data underlying this, it’s still not fabulous.”

Retail stocks helped lead the markets higher on the earnings beats. Sears and Big Lots rose sharply and Target jumped almost 8% on more than double its average daily volume.
The retail rally began with home improvement king Home Depot, which beat the Street with an adjusted profit of 64 cents per share even as its net income tumbled 7.2%. While Home Depot’s revenue fell by a worse-than-expected 9.1%, the company raised its full-year earnings outlook and exceeded weak results from rivalLowe’s a day ago.
At the same time, Target easily exceeded expectations with a second-quarter profit of 79 cents per share, 13 cents higher than estimates. Target’s revenue fell to $15.07 billion, missing analysts’ forecasts.

“Eventually we’re going to run out of those better-than-expected numbers and then it’s going to become a problem," said Weisberg.

Global Markets
European markets also rebounded from their two-day slide. London's FTSE 100 rose 0.88% to 4685.78, Frances' CAC 40 gained 0.91% to 3450.69 and Germany's DAX climbed 0.94% to 5250.74.

In Asia, Japan's Nikkei 225 advanced 0.16% to 10284.96, Hong Kong's Hang Seng jumped 0.84% to 5217.36 and China's Shanghai Composite added 1.4% to 2910.88.

In commodities, oil jumped 3.7% to over $69 a barrel, and the uptick helped boost energy shares with ConocoPhillips up 0.5% for the day.

U.S. crude settled at $69.19 a barrel, up $2.44, or 3.66 percent, with further support coming from the weaker dollar. U.S. crude later traded up to $70.08 a barrel after data from the American Petroleum Institute showed a steep drop in oil inventories.

HAPPY TRADING FOLKS !!!