U.S. stocks marched higher in early trading Tuesday on Wall Street and extended a winning streak that has recouped much of May’s sharp losses.
The strong opening marks the sixth consecutive day of gains. Stocks are moving closer to erasing the 6.6% decline in May that was fueled by concerns about the trade dispute between the U.S. and China.
The rally in stocks started last week when the Federal Reserve signaled that it is open to cutting rates to stabilize the economy if trade disputes threaten the economic recovery. Investors grew more hopeful Monday after President Donald Trump suspended plans to impose tariffs on Mexican goods after the countries struck a deal on immigration. Trump also plans to meet with Chinese President Xi Jinping in Japan later this month to discuss their ongoing trade war.
Technology stocks led the early gains. Apple rose 1%, Cisco rose 1.5%, and Nvidia rose 1.5%.
Banks helped push financial stocks higher as lower bond prices pushed treasury yields higher. The sector suffered in May as investors fled to the safety of bonds and pushed yields lower, threatening to reduce the profit banks make from loans. Higher yields help push interest rates higher, generating more profits. Bank of America rose 2%.
A range of consumer-related stocks also posted gains. Amazon rose 1%, Nike rose 1.8% and Home Depot and General Motors rose 1.5%. They are among a wide range of companies that will likely suffer if trade wars escalate and economic growth slows.
Tesla gained 3.4% ahead of its annual shareholder meeting, where CEO Elon Musk is expected to be asked about the company’s stock price, which is down 36% this year.
Heavy equipment maker Caterpillar rose 2.4% as mining stocks rallied.
Utilities fell as investors shifted from the safe-play sector and headed for stocks with more growth potential.
KEEPING SCORE: The S&P 500 index rose 0.7% as of 10:05 a.m. Eastern time. The Dow Jones Industrial Average rose 112 points, or 0.4%, to 26,174. The Nasdaq composite gained 0.9%.
TRIMMING THE (FAUX) FAT: Beyond Meat fell 19% after J.P. Morgan’s Ken Goldman and James Allen downgraded the stock to ‘neutral’. The downgrade follows a surge in the stock price from $25 to $167 since the maker of plant-based meat alternatives started trading publicly on May 2.
The sharp rise in price cost short sellers about $400 million, according to the research firm S3.
In a note to clients Tuesday, Goldman and Allen said the downgrade was “purely a valuation call.”
GOOD RETURNS: Tax preparer H&R Block jumped 8.5% after hitting investors with a triple-dose of solidly good news. The company beat fiscal fourth quarter profit expectations, raised its quarterly dividend and announced an acquisition.