U.S. stocks jumped on Tuesday as Wall Street started the second half of the year with the Dow rising to within two points of 17,000, as data showed expansion in U.S. manufacturing and better-than-expected sales for major U.S. automakers.
"The message continues to be, we had a really rough first quarter, and the second quarter is going to be better," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds.
"These numbers are reassuring us that the first quarter was the outlier, not the other way around," Garcia-Amaya added of Tuesday's economic reports, which had the Institute for Supply Management's manufacturing index coming in at 55.3 in June, nearly unchanged from May's 55.4 reading. New orders rose to a six-month high.
Netflix rose after Goldman Sachs upgraded the video-subscription service to buy from neutral; Symantec fell after Bank of Montreal downgraded the security company to market perform from outperform, and GoPro rallied, extending gains into a fourth session after the sports-video maker's initial public offering.
"We are cautious on the markets because we're getting close to our year-end targets: around 2,000 on the S&P 500, and we're not inclined to raise our target unless this next set of quarterly earnings come in strong," said Marc Doss, regional chief investment officer for Wells Fargo Private Bank.
"The really easy money has been made, so it's harder from here," added Doss.
A separate report had construction spending up 0.1 percent in May.
Chrysler reported a 9 percent jump in U.S. auto sales for June, beating expectations; General Motors topped the low bar set by Wall Street as well as negative publicity over a slew of safety recalls, and Toyota Motor and Nissan Motor reported year-to-year increases.
"Seasonality is in our favor too, oddly enough, July is a good month for us," Art Hogan, chief market strategist at Wunderlich Securities, said of historical trends that have equities rising more often than not in July.