Banks, technology firms power a rebound for stocks
Oil prices move higher; homebuilders take hit as construction slows
Stocks finished broadly higher on Wall Street Tuesday, erasing the market’s modest losses from a day earlier.
Financial, technology and health care stocks accounted for much of the rally. Banks got a boost from rising bond yields, which let them charge higher rates on loans.
Energy companies led the S&P 500 higher as the price of U.S. crude oil moved briefly above $60 a barrel. Oil hasn’t closed above $60 a barrel since November.
Homebuilders slumped on new data showing the pace of newly started residential construction projects fell sharply last month.
Even after losing some of its early strength, the broad upward turn in stocks marked a reversal for the market, which started the week on a downbeat note after racking up losses last week as investors’ jitters over a global economic slowdown intensified. That led to a troubling drop in long-term bond yields.
On Tuesday the yield on the benchmark 10-year Treasury note edged up to 2.42 percent from 2.41 percent late Monday. However, it’s still below the yield on the three-month Treasury bill, which many see as a warning sign of a possible recession.
“A lot of today’s move has to do with the change in direction in the yield curve,” said Lindsey Bell, investment strategist at CFRA. “It just goes to show that we’re kind of in a period of indecisiveness in the market, where the market is grappling with what is obviously slowing growth around the globe and a little bit of uncertainty here in the U.S. about what growth is going to look like once we get past the seasonally weak first quarter.”
The S&P 500 index gained 20.10 points, or 0.7 percent, to 2,818.46. The Dow Jones Industrial Average rose 140.90 points, or 0.6 percent, to 25,657.73. It briefly climbed 279 points.
The Nasdaq composite added 53.98 points, or 0.7 percent, to 7,691.52. The Russell 2000 index of smaller company stocks picked up 15.30 points, or 1 percent, to 1,528.17.
Major European indexes finished higher, rebounding from a day earlier.
Even with last week’s stumble, U.S. stocks remain on track to finish the quarter with solid gains at the end of this week. The benchmark S&P 500 index is up more than 12 percent so far in 2019, an unusually strong start to a year.
Still, uncertainty remains over how the U.S. and China will resolve their costly trade dispute and how a slowing global economy will affect corporate profits as companies begin to report results for the first quarter next month.
“We have a lack of catalysts right now before we get into earnings season,” said Bell. “The market is going to be a little bit erratic until we get clarity on the direction of earnings, the direction of the trade deal, the direction of Brexit, all these major uncertainties out there.”
Bed Bath & Beyond soared 22 percent in very heavy trading after The Wall Street Journal reported that the troubled retailer is being targeted by activist investors.