Amazon helped push S&P 500 to its best day in two months yesterday
A rally in Amazon stock and a jump in the oil price helped push US shares up on Tuesday – with the S&P 500 enjoying its best day in two months.
Amazon's share price jumped 3.43 per cent to a record of $703.07, which boosted the S&P 500 and the Nasdaq, after investment firm Bernstein upped its price target for the stock to $1,000 from $770, the highest target price on Wall Street.
"[W]e are bullish in the short, medium, and long term and think we may see margins expand much faster than they have in the next two years than they have in the last two," said Bernstein's Carlos Kirjner.
"We think consensus estimates are shockingly low in the next two to three quarters and even lower four to six quarters out."
He added that Bernstein believes "Amazon's businesses are now so large, fast-growing, and profitable that it is harder and harder for the company to find new areas of investment to keep up with the growth in gross profits".
The Dow Jones industrial average climbed 1.26 per cent to end at 17,928.35 and the S&P 500 jumped 1.25 per cent to 2,084.39. This marked the biggest daily percentage gain since 11 March for both indices.
The Nasdaq Composite added 1.26 per cent to 4,809.88, its biggest gain since 13 April.
"A great triple-digit day, it's fantastic," said Jake Dollarhide, chief executive officer of Longbow Asset Management. "People are feeling confident."
Meanwhile, the proportion of companies that have raised their forecasts versus those that lowered forecasts is the healthiest it has been since 2011, according to Thomson Reuters data.