Wall Street’s momentum swings up

Wall Street kicked off a holiday-shortened week with broad gains for stocks Tuesday, as the market recovered most of its losses from last week.

The S&P 500 gained 0.8%, pulling to within 1% of its record high set earlier this month. About 60% of the companies in the benchmark index rose.

Technology, communication services and health care stocks accounted for much of the rally, though energy sector companies notched the biggest gain. Treasury yields rose.

The gains marked a reversal from last week, when stocks ran out of steam after a strong start to the year.

Markets have been rising on enthusiasm about a coming economic recovery as COVID-19 vaccines roll out and Washington gets set to try for another massive round of stimulus for the economy.

Janet Yellen, Presidentelect Joe Biden’s nominee to be Treasury Secretary, is calling on Congress to do more to boost the economy. In testimony prepared for her confirmation hearing on Tuesday, she said that with interest rates near their record lows, “the smartest thing we can do is act big” to avoid an even worse downturn in the near term. Mr. Biden last week released details of a $1.9 trillion plan to bolster the economy, which would include $1,400 cash payments for most Americans.

“If most of this is implemented, it does suggest significant pickup in economic growth as we head through to the fourth quarter of this year,” said David Kelly, chief global strategist at JPMorgan Funds.

The S&P 500 rose 30.66 points to 3,798.91. The Dow Jones Industrial Average added 116.26 points, or 0.4%, to 30,930.52. The Nasdaq composite gained 198.68 points, or 1.5%, to 13,197.18. Traders continued to bid up shares in smaller companies, a sign of confidence in the prospects for future economic growth.

The Russell 2000 index picked up 27.94 points, or 1.3%, to 2,151.14.