Indexes hit one-month highs
Investors buoyed by Chinese government’s spending increases
U.S. stocks rallied to their highest level in more than a month Tuesday after China’s government moved to inject more life into its economy by cutting taxes and increasing spending. Netf lix led a surge in high-tech companies.
Health care companies and banks rose as major companies including Unitedhealth and Jpmorgan Chase announced their fourth-quarter results.
The British pound wobbled after legislators soundly rejected Prime Minister Theresa May’s plan governing the country’s departure from the European Union. While the deal’s defeat might herald more chaos for companies in Britain and Europe in the months ahead, the outcome of the vote was long expected and stocks didn’t react much.
Investors were encouraged to see China makes moves to stimulate growth. China is enduring its worst slowdown since the global financial crisis amid a punishing tariffs dispute with the U.S.
“It shows clear signs they are worried about the economy,” said Lindsey Bell, an investment strategist at CFRA. But to investors, who want China’s economy to pick up again, Bell said the latest steps were “really welcome news.”
The S&P 500 index rose 27.69 points, or 1.1 percent, to 2,610.30, its first close above 2,600 since Dec 13. The Dow Jones Industrial Average added 155.75 points, or 0.7 percent, to 24,065.59.
The technology-heavy Nasdaq composite jumped 117.92 points, or 1.7 percent, to 7,023.83.
Chinese leaders plan to reduce taxes, increase government spending, and provide financing to private and small enterprises in a bid to strengthen the world’s second-largest economy. China is enduring its worst slowdown since the global financial crisis, partly because of a punishing tariff dispute with the U.S.
That helped tech companies, which make big chunks of their sales in China. Microsoft rose 2.9 percent to $105.01 and Broadcom climbed 2.2 percent to $256.49.
Hong Kong’s Hang Seng rebounded 2 percent, wiping out a loss on Monday. It’s moved higher this month but is still down almost 19 percent from its peak in late January 2018.
Japan’s Nikkei 225 index, reopening after a market holiday, added 1 percent. The Kospi in South Korea jumped 1.6 percent.
Netflix announced the biggest price increase in its history to help to pay for its huge investment in original shows and films and finance the heavy debt it has assumed to ward off rivals such as Amazon, Disney and AT&T. The price of its most popular video-streaming plan will rise to $13 per month from $11.
Netflix climbed 6.5 percent to $354.75. That touched off strong gains for the other “FANG” stocks: Facebook rose 2.4 percent to $148.95, Amazon gained 3.5 percent to $1,674.56, and Google’s parent company Alphabet jumped 3.3 percent to $1,086.51.