Stocks rose higher Tuesday as market participants cheered a lighter-than-expected inflation reading ahead of more key economic reports due out later this week. The Dow Jones Industrial Average climbed over 200 points, while the S&P 500 Index added more than 0.1% and Nasdaq Composite lost about 0.2%.
Here's how the market settled on Tuesday:
S&P 500 Index (NYSE: SPY): +0.11% or +6.69 points to 5,842.91
Dow Jones Industrial Average (NYSE: DIA): +0.52% or +221.16 points to 42,518.28
Nasdaq Composite Index (NASDAQ: QQQ): -0.23% or -43.71 points to 19,044.39
Moving Markets:
Wholesale Inflation rose at a less-than-expected rate in December, the Bureau of Labor Statistics reported Tuesday, offering another sign that the Federal Reserve may maintain interest rates at their current level for longer as inflationary pressures ease.
The producer price index (PPI) rose 0.2% on the month, less than November's 0.4% increase and below the Dow Jones estimate for another 0.4% increase. Excluding food and energy, core PPI was flat, also below estimates for a 0.3% rise, while adding trade services to the exclusions saw core PPI rise by 0.1%.
On an annual basis, PPI rose 3.3% for the year, still above last year's total increase of 1.1%.
On the Earnings Front:
KB Home (NYSE: KBH) shares rose Tuesday after the homebuilder reported strong fiscal fourth-quarter revenue and profit late Monday, driven by improved housing market fundamentals. Notably, the company said home orders increased by 41% to 2,688 during the quarter, with order value also rising 41% to $1.32 billion.
"In 2025, we will remain focused on expanding our scale, profitability and returns. We believe we are poised for growth having invested over $2.8 billion in land acquisition and development in 2024, and we plan to increase our investment again in 2025. These investments will contribute to future community count growth and, together with our affordably priced personalized homes that our Built to Order model offers, we believe we are well positioned to meet buyer demand. In addition, as in 2024, during which we returned over $420 million to our shareholders through both repurchases and dividends, we intend to continue our balanced capital allocation approach," CEO Jeffrey Mezger said in a release.
Looking ahead, KB Home expects housing revenues in the range of $7 billion to $7.5 billion in fiscal 2025, and the average selling price in the range of $488,000 to $498,000.
Revised Guidance:
Lululemon Athletica (NASDAQ: LULU) shares dipped Tuesday despite the apparel company raising its fourth-quarter sales outlook to a range of 11% and 12%, or between $3.56 billion and $3.58 billion, up from its previous range of $3.48 billion and $3.51 billion, as its benefits from a strong holiday shopping season. The company also raised its profit outlook, now expecting fourth-quarter earnings per share between $5.81 and $5.85.
"During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth quarter guidance," CFO Meghan Frank said in a statement.
Eli Lilly (NYSE: LLY) reduced its full-year 2024 revenue guidance on Tuesday, now expecting a lower $45 billion compared to its previous guidance range of $45.4 billion to $46 billion issued in October. The new outlook, which still represents over 30% annual growth, comes as demand for its weight loss and diabetes drugs as not met its high goals.
"While the U.S. incretin market grew 45% compared to the same quarter last year, our previous guidance had anticipated even faster acceleration of growth for the quarter," CEO Dave Ricks said in a statement. "That, in addition to lower-than-expected channel inventory at year-end, contributed to our Q4 results."
The drugmaker now expects fiscal 2025 sales of between $58 billion to $61 billion.
In the News:
Boeing (NYSE: BA) delivered more than 348 airplanes in 2024, the company announced Tuesday, sending out 30 planes to customers in December as the aerospace manufacturer restarted production of its 737 Max planes after a nearly eight-week machinist strike ending in November. Boeing said it logged 142 gross orders in December for new planes, with total gross orders for the year coming in at 569.
The U.S. Consumer Financial Protection Bureau announced Tuesday it has issued a lawsuit against Capital One (NYSE: COF), claiming the bank had mislead consumers about their savings account rates and had "[cheated] families out of billions of dollars on their savings accounts," according to CFPB Director Rohit Chopra.
The U.S. Federal Trade Commission announced Tuesday a report that UnitedHealth Group's (NYSE: UNH) Optum, CVS Health's (NYSE: CVS) CVS Caremark and Cigna's (NYSE: CI) Express Scripts had significantly raised the prices of certain medicines at their affiliated pharmacies between 2017 to 2022, netting $7.3 billion in excess revenue.
"The $7.3 billion is the difference between what they are reimbursing themselves and what it is estimated to cost them to acquire the drug," an agency spokesperson told reporters during a press briefing on Tuesday, adding that the figure could be "an underestimate."
For Wednesday:
Market participants will turn their attention towards December's consumer price index reading due out Wednesday morning, offering another key inflation reading ahead of the Fed's policy meeting later this month. The fourth-quarter earnings season also kicks off on Wednesday, with reports from JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), BlackRock (NYSE: BLK) and Citigroup (NYSE: C) slated to release before market open.