The major domestic equity indexes and the Russell 2000 index posted record high closes for the second straight day on Tuesday, helped by gains in airlines and the automobile manufacturers.
Major automakers posted higher new vehicle sales in September as consumers in hurricane-hit parts of the country rushed to replace flood-damaged cars. Cars and light trucks hit saw their largest sales rate increase in a dozen years during September as many owners scrambled to replace vehicles lost to hurricanes that struck Texas and Florida in the past six weeks.
The seasonally adjusted annual sales rate for all light vehicles hit 18.57 million units, up from 16.14 million in August. It was the highest sales rate since July 2005. As a result, General Motors’ shares chalked up a gain of 3.1 percent and hit a record intraday high, while Ford was up 2.1 percent.
Airline shares were among the best performers in the S&P 500 index. Delta was also the S&P 500’s top percentage gainer, rising 6.6 percent after it reported that its “cargo ton miles” metric rose 9.4 percent in September from a year earlier.
Shares of United Continental gained 6.1 percent while the S&P 1500 airlines index was up 5.5 percent
The news was the latest evidence of economic growth. The signs, including factory data on Monday, have helped lead the market to recent record highs and boosted shares of economically sensitive companies including in materials and industrials.
The S&P industrials index was up 0.5 percent and among sectors with the largest gains on Tuesday.
All three hit major equity indexes hit record closing highs, along with the Russell 2000 small-cap index, which has been lifted recently by optimism about tax law overhaul prospects. Investors are also looking at upcoming quarterly earnings from major U.S. companies to help justify lofty market valuations.
Third-quarter earnings for S&P 500 companies are expected to have risen 5.5 percent from a year earlier, according to Thomson Reuters research, after rising a stronger-than-expected 12.3 percent in the second quarter.
Lennar’s shares rose 4.8 percent following a higher-than-expected quarterly profit from the nation’s second largest homebuilder.
Shares of TravelCenters of America were up 8.4 percent after Warren Buffett’s Berkshire Hathaway acquired a 38.6 percent stake in TravelCenters’ competitor, Pilot Flying J.
Approximately 5.9 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.3 billion share daily average for the past 20 trading days, according to Thomson Reuters data.