The major domestic equity indexes closed out the trading day on Tuesday well into positive territory after a choppy session earlier in the day as investors looked forward to earnings season while the S&P 500 pushed above a key support level and Amazon.com shares jumped on bets that criticism from Trump would not translate to policy changes.
After a volatile session Amazon ended up being the largest lift for Nasdaq. The White House said it was not responding even as Trump continued his attacks on the online retailer, according to a Bloomberg report.
Traders said they were heavily focused on technical levels after investors fled on Monday when the S&P 500 breached its 200-day moving average. The benchmark index pushed above that support level just ahead of the last hour of trading on Tuesday and stayed higher for the rest of the session.
Wall Street analysts expect S&P 500 earnings to increase 18.4 percent for the first quarter, according to Thomson Reuters data. However, technical sellers could still put pressure on stocks on Wednesday as the S&P’s closing level was still too close for comfort to its 200-day moving average and its February 9 low.
After spending the day swinging between positive and negative territory the S&P 500’s technology sector, the largest driver in the current bull market, ended up 1 percent.
Tesla gained 6 percent after the company indicated it did not need to raise additional capital this year and announced robust production numbers for its cheaper Model 3 sedans.
Amazon ended the trading day up 1.5 percent at $1,392.05 though it was still well below its March 13 record of $1,617.54.
In its high-profile market debut, Spotify closed at $149.01, 12.9 percent higher than the $132 reference price set by the NYSE late on Monday, though well below its intraday high of $169 and its opening price of $165.90.
Viacom fell 3.7 percent after Reuters reported that CBS Corp planned to make an all-stock offer that valued the media company below its current market valuation. CBS shares rose 4.2 percent. CNBC reported late Tuesday that CBS had submitted a bid for Viacom well below its market value.
Approximately 7.14 billion shares traded on the major domestic equity exchanges, as compared to the 7.31 billion share average over the past 20 trading days.
Auto Sales Rise
The auto industry reported higher new vehicles sales for March on the back of a strong economy and large consumer discounts, sending shares in Detroit’s automakers up. Industry sales in March rose 2.5 percent to 1,653,529, according to Autodata, which said the seasonally adjusted annual rate for the month was a better-than-expected 17.5 million versus 16.8 million a year ago.
General Motors chalked up a 16 percent increase in new vehicle sales from the previous March, led by a 14 percent increase in higher-margin retail sales to consumers. GM notched double-digit sales increases across all brands in March in general and more specifically for its SUV and pickup truck models.
Although GM said its average transaction price was up $900 in the first quarter, the company’s consumer discounts as a percentage of transaction prices hit 14.5 percent in March.
Fiat Chrysler reported a 14 percent increase and said it saw a 45 percent spike in sales of its popular Jeep models, giving the brand its best sales month on record. The strong results for March followed a weak performance in February.
Last year, auto sales declined 2 percent after hitting a record high of 17.55 million units in 2016. Sales are expected to continue to drop in 2018, as interest rates rise and push up monthly car payments. Also, millions of nearly new vehicles will return to the market this year after coming off lease, providing a lower-cost alternative for consumers.
GM indicated that it will stop reporting monthly vehicle sales, saying the 30-day snapshot does not accurately reflect the market and will instead issue quarterly sales. Other automakers have not yet said whether they will follow suit.
Industry analysts consider discounts of over 10 percent to be unhealthy as they undermine resale values and erode profits. When issuing a March forecast last week, industry consultants J.D. Power and LMC Automotive said industry wide discounts in the first half of the month were at 10.3 percent.
Fiat Chrysler’s retail sales outstripped those of Ford, but Fiat Chrysler also saw a 22 percent increase in lower-margin fleet sales to rental car companies and government agencies. Over the past year Fiat Chrysler has pursued a policy of cutting fleet sales.
Ford reported a 3.4 percent increase in overall sales for March, led by an 8.7 percent rise in fleet sales. Retail sales were up just 0.8 percent in the month, but Ford said sales of its best-selling F-Series pickup trucks were the best since 2000.
Toyota reported a 3.5 percent increase in sales in March, with double-digit increase in SUV and pickup truck sales offsetting a 6.1 percent decrease in sedan sales. Sales of the company’s completely revamped flagship Camry sedan fell 1.1 percent.
Honda reported that its March sales rose 3.8 percent, thanks largely to SUV and pickup truck sales. The automaker’s new Accord sedan saw a 9.9 percent sales decrease.
Nissan bucked the trend for the month with a 3.6 percent decline in sales, led by an 8.9 percent drop in sedan sales. Consumers have increasingly shunned passenger cars in favor of more comfortable, higher-margin SUVs and pickup trucks.
In afternoon trading, GM shares were up 2.8 percent at $36.75, while Fiat Chrysler shares rose 9 percent to $21.75, and Ford shares were up 2.4 percent at $11.13.