Confidence boosts stock indexes

Investors are optimistic about new focus on tax reform, rising home prices, company 1Q reports.

Banks and other financial companies led U.S. stock indexes sharply higher Tuesday, snapping an eight-day losing streak for the Dow Jones industrial average.

The rally was broad, with materials and industrial companies among the biggest gainers. Energy stocks notched a big gain as crude oil prices moved higher.

The market got a boost from new data showing that consumer confidence in the U.S. hit its highest level since 2000.

Investor optimism that Congress and the White House are pivoting to tax cuts and other business-friendly policy proposals after spending recent weeks focused on health care also helped send the market higher, said JJ Kinahan, chief market strategist at TD Ameritrade.

“That’s all the market is really hanging its hat on,” Kinahan said.

“The market is sort of in a holding pattern waiting for additional clarity from the administration on corporate tax reform,” said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank. “We do view the pivot away from health care reform on Friday as an overall net positive.”

Traders also were encouraged by the latest Standard & Poor’s CoreLogic CaseShiller home price index, which showed that U.S. home prices rose at the fastest pace in more than two years in January.

Several companies reported improved quarterly results or outlooks, which also helped put traders in a buying mood.

Darden Restaurants jumped 9.3 percent after the owner of Olive Garden reported strong quarterly results and said it will buy the Cheddar’s Scratch Kitchen chain for $780 million.

Red Hat climbed 5.2 percent after the open-source software company reported strong sales and solid guidance for the current quarter. The stock added $4.28 to $86.48.

Carnival rose 0.7 percent after the cruise line operator served up solid first-quarter results and a better-than-expected estimate for the second quarter. The stock, which closed at an all-time high on Monday, gained another 39 cents to $59.26.

General Motors rose 2.4 percent after its board voted to reject a proposal from investor David Einhorn to split the automaker’s stock into two classes. GM shares picked up 85 cents to $35.56.

Benchmark U.S. crude rose 64 cents, or 1.3 percent, to close at $48.37 per barrel in New York. Brent crude, used to price international oils, climbed 58 cents, or 1.1 percent, to close at $51.33 a barrel in London.