Five in a Row: S&P 500 Extends Rally on Huge Earnings Beats from Estee Lauder, Ralph Lauren

U.S. stocks extended their rally on Tuesday, as positive earnings surprises from a pair of discretionary companies propelled the S&P 500 to two-month highs. Crypto coins pivoted slightly lower in afternoon trading, with Stellar, IOTA and Tron losing strength.

Rally Continues

The large-cap S&P 500 Index rose 0.5% to 2,737.70, its highest settlement since early December. Gains were concentrated in just six of 11 primary sectors, with the consumer discretionary and information technology components among the biggest gainers.

The Dow and Nasdaq joined the S&P 500 at multi-month highs Tuesday. The Dow 30 index climbed 172.15 points, or 0.7%, to close at 25,411.52. The technology-focused Nasdaq Composite Index registered a gain of 0.7% to finish at 7,402.08.

A measure of implied volatility known as the CBOE VIX continued to hover near four-month lows on Tuesday, as calm returned to the market following a disastrous fourth quarter. The VIX “fear index” touched a session low of 15.04 on a scale of 1-100 where 20 reflects the historical mean.

Upbeat Earnings

Shares of Estee Lauder Companies Inc. (EL) and Ralph Lauren Corp (RL) surged on Tuesday after the companies reported better than expected earnings.

Estee Lauder’s fiscal Q2 sales climbed to $573 million, or $1.55 per share. Adjusted earnings per share reached $1.86, smashing the consensus forecast of $1.55. Sales rose 7% to $4.01 billion, which was higher than the expected $3.92 billion.

Ralph Lauren’s fiscal third-quarter earnings came in at $2.32 per share, which was well above the median estimate of $2.15 per share. Revenues grew to $1.73 billion, higher than the $1.66 billion expected.

Corporate America is headed for an earnings growth rate of 12.4% for the December quarter, according to FactSet’s latest report. However, the financial research firm is expecting a big pullback in year-over-year profitability this quarter. Read more: U.S. Stocks Rise Despite Grim Earnings Guidance.

Cryptocurrencies Struggle for Momentum

Tuesday was another quiet session for crypto traders despite reports that Facebook had acquired a smart contract firm to aid in its blockchain expansion. The social media giant has reportedly “acqui-hired” a British company by the name of Chainspace. Although not yet confirmed, Facebook may be looking to bring stablecoin capabilities to its WhatsApp messaging service. More on this story: Week in Review: Crypto Rally Gains Steam, Western Union Open for Business and Facebook Dabbling in Stablecoin.

The cryptocurrency market cap declined slightly on Tuesday after posting modest gains earlier in the day. At the time of writing, the total market was worth roughly $113.7 billion, according to CoinMarketCap. Total trade volumes continued to hover near $16.5 billion.

Bitcoin continued to hold below $3,500, virtually unchanged from week ago levels. Altcoins Stellar, bitcoin SV, IOTA and NEM were down at least 2.8% apiece. Tron’s native TRX token edged down 0.9%.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi