Markets rebound as financial fears with Turkey ease
NEW YORK — U.S. stocks rallied Tuesday as banks, retailers, and smaller companies jumped. That helped the market recover most of its losses from the previous two days.
The Turkish lira steadied as officials from Turkey and the U.S. said the countries are in talks to ease diplomatic tensions, which have resulted in high tariffs on Turkish steel and aluminum. Stocks in emerging markets like Argentina, Russia and Brazil jumped.
In the U.S., the biggest gains went to small and mid-size companies, which do more business domestically compared to the large multinational firms on indexes like the S&P 500 and the Dow Jones Industrial average. Retailers rose, thanks in part to strong quarterly reports.
The reduced tensions with Turkey also stopped a rally in bond prices and sent yields and interest rates higher. That helped banks. Industrial and basic materials companies also rose Tuesday, but compared to other parts of the market, they didn’t recover as much of their losses.
Invesco Chief Global Market Strategist Kristina Hooper said investors are shifting money into more U.S.-focused companies in response to the Trump administration’s aggressive handling of its dispute with Turkey, a longtime member of NATO.
“This is a reminder that the U.S. is a very different country than it was just a few years ago,” she said.
The S&P 500 index climbed 18.03 points, or 0.6 per cent, to 2,839.96. The Dow Jones Industrial Average gained 112.22 points, or 0.4 per cent, to 25,299.92.
The Nasdaq composite added 51.19 points, or 0.7 per cent, to 7,870.89. The Russell 2000 index advanced 17.26 points, or 1 per cent, to 1,692.58.
The S&P 500 fell a combined 1.1 per cent Friday and Monday as investors worried that Turkey’s financial woes would affect other countries.
Many retailers will report their quarterly results this week, a potential hint about how much money consumers are spending. Tapestry, the parent company of Coach and Kate Spade, jumped after its fourth-quarter results surpassed analysts’ estimates. The stock surged 12 per cent to $53.16.
Auto parts retailer Advance Auto Parts jumped 7.8 per cent to $156.13 after it did better than expected in the second quarter. Competitors AutoZone and O’Reilly Automotive climbed as well.