By Yasin Ebrahim
Investing.com -- The Dow rallied Tuesday, as investors piled into energy and growth stocks to help the broader market start the week on the front foot following a rout last week.
The Dow Jones Industrial Average gained 2.2%, or 641 points, while the S&P 500 and the Nasdaq closed up about 2.5% higher.
Energy climbed 5%, supported by a 6% spike in ExxonMobil (NYSE:XOM) after Credit Suisse upgraded its rating to stock outperform from buy amid expectations the oil major’s differentiated growth strategy will drive “excellent” returns.
Tesla (NASDAQ:TSLA), meanwhile, drove the gains for consumer stocks, rising more than 9% after chief executive Elon Musk detailed to lay off about 10% of the electric vehicle maker’s salaried staff
Tech found its footing following a selloff last week as investors snapped up beaten down big tech names including Apple (NASDAQ:AAPL) and Alphabet.
Alphabet Inc Class A (NASDAQ:GOOGL) jumped more than 4% as the search-engine is reportedly in talks with Netflix (NASDAQ:NFLX) about a potential advertising agreement. Netflix ended the day down nearly 3%.
Twitter (NYSE:TWTR) gained nearly 3% after the social media giant sent a letter to shareholders urging them to back Musk’s $44 billion take-private deal. Musk reportedly highlighted three factors that needed to be addressed to proceed with the deal including Twitter shareholder approval, information on fake accounts on the platform and securing financing for the deal.
Chip stocks were also heavily involved in the tech meltup, powered by a surge in NVIDIA (NASDAQ:NVDA).
Kellogg Company (NYSE:K) climbed more than 2% after the cereal maker detailed plans to split into three separate public entities focussed on cereal, snacks, and plant-based businesses. The spin-offs are expected to be completed in the third quarter.
On the economic data front, the housing market continues to show signs of cooling, though prices remain firm amid a lack of supply.
“The sharp decline in resale activity will thus weigh considerably on the housing competent of GDP which is on track to contract by roughly 20% in the second quarter,” Jefferies said in a note.
Housing stocks remained firm, with KB Home (NYSE:KBH), PulteGroup (NYSE:PHM) and Lennar in the green.
Lennar (NYSE:LEN) rose 2% after reporting second-quarter results that topped Wall Street forecasts on both the top and bottom lines.
The growing data pointing to economic weakness prompted analysts at Goldman Sachs to lift their bets on a recession over the next year to 30%, up from 15% previously.
In other news, Spirit Airlines (NYSE:SAVE) climbed nearly 8% after JetBlue Airways (NASDAQ:JBLU) sweetened its offer to buy the low-cost airline for $33.50 a share.