Technology stocks lead broad rally
Dow Jones up, Nasdaq sets record
Technology companies led a broad rally Tuesday on Wall Street that drove the Dow Jones Industrial Average more than 400 points higher and gave the S&P 500 its best day in more than five months.
The gains also pushed the techheavy Nasdaq to an all-time high and added to a solid start to February for the broader market after a downbeat January.
Investors welcomed a decision by China’s central bank to inject $57 billion into its markets. The move is the latest step by Beijing to soften the financial blow of the recent virus outbreak.
“If China’s going to do what they can to support their markets, then maybe we don’t have as much cause for concern for our markets,” said Willie Delwiche, investment strategist at Baird.
Apple and Microsoft were among the tech-sector standouts. Like other major technology companies, they rely heavily on business with China. Health care, industrial, financial stocks also notched solid gains.
Utilities, real estate companies and other safe-play assets lagged as investors became more comfortable taking on risk. Prices for U.S. government bonds fell sharply, sending yields higher, and the price of gold also fell.
The S&P 500 index rose 48.67 points, or 1.5%, to 3,297.59. It was the index’s biggest single-day gain since early August. The Dow climbed 407.82 points, or 1.4%, to 28,807.63.
The Nasdaq gained 194.57 points, or 2.1%, to 9,467.97, a record high. The Russell 2000 index of smaller company stocks picked up 24.56 points, or 1.5%, to 1,656.77.
China’s latest measure to shore up its markets follows an announcement from Monday that the government would put $173 billion into its markets as they reopened from an extended break.
The bond market was also signaling more confidence among investors Tuesday. The yield on the 10-year Treasury jumped to 1.60% from 1.52% late Monday. Perhaps more important, the 10year yield also jumped above the threemonth Treasury yield of 1.56%.
The leapfrog move silenced a recession warning that had been ringing in the bond market, at least for now. Yields for short-term Treasurys are rarely higher than for longer-term Treasurys, and when it does happen, a rule of thumb says a recession may be on the way in about a year or so. This recession warning signal, which has a fairly accurate but not perfect history, had begun flashing in recent days on worries about the virus for the first time since October.
Wall Street continued to assess another busy round of corporate earnings Tuesday. Ralph Lauren jumped 9.2% and Clorox gained 5% after reporting solid financial results. Shares in Google’s parent, Alphabet, dropped 2.5% after the company gave investors a disappointing revenue report.
Gold fell $26.80 to $1,550.40 per ounce, silver fell 11 cents to $17.53 per ounce and copper rose 4 cents to $2.55 per pound.
The dollar rose to 109.51 Japanese yen from 108.67 yen on Monday. The euro weakened to $1.1042 from $1.1063.
Markets in Europe and Asia finished higher.