By Wallace Witkowski, MarketWatch , Ryan Vlastelica

All of S&P 500's 11 sectors higher on the day but broad averages off intraday bests

U.S. stocks rose on Tuesday, with major indexes adding to their string of records even as concerns remained about the market's valuation.

Wall Street was off its highs of the session as midday hit, but the day's gains were broad, with all 11 of the S&P 500's primary sectors higher. Energy shares were leading gainers. And the Dow got a particular boost from Home Depot Inc. and Wal-Mart Stores Inc., which rallied on the back of their quarterly results.

The Dow Jones Industrial Average rose 0.5%, or 111 points, to 20,735. The S&P 500 index rose 0.6% to 2,364, a gain of 13 points. The Nasdaq Composite Index added 21 points, or 0.4%, to 5,860.

All three hit all-time intraday highs, continuing a recent streak. The Dow is on track for its eighth straight daily advance, while both the S&P and the Nasdaq have gained in nine of the past 10 sessions. However, the S&P did pull back from its early advance, having risen as much as 0.6% earlier in the day.

While every S&P 500 sector was higher, the rally was led by real-estate stocks, up 1.2%, and utilities, up 0.9%, with the heaver-weighted energy sector up 0.8% on crude-oil gains, and consumer staples up 0.7%.

The market has been in a pronounced uptrend since the election of Donald Trump in November. Investors are hoping that the policies he is expected to pursue, including tax cuts and deregulation, will accelerate economic expansion and lift corporate profits. Trump's recent suggestions that policies would be unveiled soon have spurred recent buying, although few details have been forthcoming.

Karyn Cavanaugh, senior market strategist at Voya Financial, said in an interview she believes -- with some minor pullbacks -- stock market gains can continue for a while.

"Those waiting for the other shoe to drop can be waiting for a long time," she said. Cavanaugh said that while a lot of Trump's promises may be baked into current prices, so many different variables are in play with changes to tax policy, trade, and deregulation, that there is still room left to run.

"Economic data is coming in on the upside, global growth is accelerating, there's an increase in M&A, and optimism is higher, so the good outweighs the bad until we get anything that changes that scenario," Cavanaugh said, adding that while valuations may be above historic highs, compared with bonds they are still relatively cheap.

With stock valuations stretched (http://www.marketwatch.com/story/by-one-measure-stock-valuations-are-at-their-highest-level-since-2004-2017-02-17) by many metrics, some investors are concerned that the market could be vulnerable in the event the policies disappoint in their magnitude or structure.

"The rally is getting long in the tooth, and once the euphoria wears off we will need to know when we'll get policies and how they will impact corporate profits," said Katrina Lamb, head of investment strategy and research at MV Financial. "If you think there are still double-digit gains left to be had, that seems optimistic. A lot of what we've seen lately seems to be people who didn't buy into the rally at first and are coming in now in something of a 'pain trade.'"

Read:How Trump's stock market ranks in his first 30 days in office (http://www.marketwatch.com/story/how-president-trumps-stock-market-performance-in-his-first-30-days-ranks-2017-02-17)

Economic docket: In the latest economic data, Markit's read on manufacturing fell in February (http://www.marketwatch.com/story/momentum-in-us-manufacturing-services-slows-in-february-markit-2017-02-21), as did the firm's services gauge.

Data preview:'Soft' side of economy soars under Trump. But here's the 'hard' truth (%e2%80%98Soft%e2%80%99%20side%20of%20economy%20soars%20under%20Trump.%20But%20here%e2%80%99s%20the%20%e2%80%98hard%e2%80%99%20truth)

(http://projects.marketwatch.com/2017/trump-today-signup/)

Federal Reserve officials should also draw some attention. Philadelphia Fed President Patrick Harker, who spoke at the Wharton School of the University of Pennsylvania, commented that the U.S. needs to approach higher education differently and suggested student debt reform (http://www.marketwatch.com/story/feds-harker-says-us-can-learn-from-australia-on-student-debt-2017-02-21), pointing to income-linked repayment plans that are in use in Australia.

Regarding a potential hike in U.S. interest rates, Harker said in a Friday interview for Market News International that he "would not take March off the table at this point." That view sent Treasury yields and the dollar higher in Asian trading Tuesday.

Stocks to watch: Retailers are in the spotlight, with shares of Home Depot Inc. (HD) up 1% after the company reported better-than-expected results, upping its dividend and setting a $15 billion buyback.

Wal-Mart Stores Inc.(WMT) was up 3.1% after posting earnings that beat forecasts and guidance that was in line with its forecast. The retailer also raised its dividend 2% to $2.04 (http://www.marketwatch.com/story/wal-mart-raises-dividend-2-to-204-2017-02-21).

Verizon Communications Inc.(VZ) and Yahoo Inc.(YHOO) are expected to cut their merger price by as much as $350 million, The Wall Street Journal reported. Verizon rose 0.4% while Yahoo added 0.8%.

Apple Inc.(AAPL), the largest U.S. company by market cap, rose 0.6% and hit an intraday record after Morgan Stanley raised its price target (http://www.marketwatch.com/story/apples-stock-set-for-record-high-open-after-morgan-stanley-boost-price-target-2017-02-21) on the company, citing optimism over China sales.

U.S.-listed shares of HSBC Holdings PLC(HSBA.LN) fell 5.7%. The Asia-focused bank said its net loss widened to $4.23 billion (http://www.marketwatch.com/story/hsbc-loss-widens-to-423b-plans-further-buyback-2017-02-21) in the fourth quarter from $1.33 billion in the year-ago period.

U.S.-listed shares of Unilever PLC(ULVR.LN) tumbled 7.7% and Kraft-Heinz Co.(KHC) dropped 3.3% after Heinz on Sunday dropped its $143 billion offer (http://www.marketwatch.com/story/kraft-heinz-withdraws-bid-for-unilever-2017-02-19) for the food rival just two days after making public a bid to combine the two companies. Meanwhile, shares of Mondelez International Inc.(MDLZ) rallied 5%.

Other markets: Asian markets traded mixed (http://www.marketwatch.com/story/china-hong-kong-stocks-get-off-to-fast-start-on-slow-trading-day-2017-02-19), with the Nikkei 225 index closing up 0.7% and the Hong Kong Hang Seng Index dropping 0.8%. European stocks finished higher across the board (http://www.marketwatch.com/story/european-stocks-rise-as-manufacturing-activity-perks-up-2017-02-21) after data showed a better-than-expected reading on preliminary manufacturing data.

The ICE Dollar Index (http://www.marketwatch.com/story/dollar-rises-after-fed-comments-euro-weakens-2017-02-2) was higher, with the dollar gaining against both the euro and the British pound . Crude-oil futures (http://www.marketwatch.com/story/oil-prices-rise-as-investors-increase-bullish-bets-on-prices-2017-02-21) settled up 1.1% at $54.33 a barrel, while gold prices (http://www.marketwatch.com/story/gold-knocked-lower-by-rising-dollar-as-rising-rate-commentary-picks-up-2017-02-21) settled down 20 cents at $1,238.90 an ounce.

Read:Why the 'next leg in the oil bull market' is coming soon (http://www.marketwatch.com/story/why-the-next-leg-in-the-oil-bull-market-could-come-soon-2017-02-20)

--Barbara Kollmeyer in Madrid contributed to this article

 

(END) Dow Jones Newswires

February 21, 2017 14:59 ET (19:59 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.