Markets shake off doldrums

Investors welcome encouraging news on retail sales

Stocks bounced back after a lackluster start to the week with a broad rally Tuesday as traders got back to buying again after a mostly miserable few weeks on Wall Street.

The S&P 500 rose 2 percent, with more than 90 percent of the companies in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3 percent and the Nasdaq gained 2.8 percent.

Big tech stocks led the rally, with Apple and Microsoft among the biggest winners. Small-company stocks rose more than the rest of the market, a signal that investors are feeling bullish about the economy. Treasury yields rose.

Investors welcomed an encouraging report on retail sales and reviewed mixed batch of earnings updates from several big retailers. The solid rebound for stocks comes as the broader market struggles to break a six-week long slump that has been interrupted at times by sharp rallies.

“All three indices are down double digits for the year, so we can’t get super excited about this,” said Sylvia Jablonski, chief investment officer at Defiance ETFS. “But I think it’s a good day, and good news, particularly on the consumer, brings investors into the market.”

The S&P 500 rose 80.84 points to 4,088.85. The Dow gained 431.17 points to 32,654.59. The Nasdaq added 321.73 points to 11,984.52. The Russell 2000 index of smaller companies climbed 56.87 points, or 3.2 percent, to 1,840.30.

The highly volatile technology accounted for a big slice of the S&P 500’s gains. Apple rose 2.5 percent and Microsoft rose 2 percent. Pricey stock values for many big technology companies give the sector more weight in pushing the broader market up and down.

Health care companies also helped lift the market. Abbott Laboratories rose 4.4 percent after the company made a deal with regulators to ramp up production of baby formula amid a shortage.

Banks gained ground along with rising bond yields, which they rely on to charge more lucrative interest on loans.

The Commerce Department said U.S. retail sales rose 0.9 percent in April. The solid increase was driven by higher sales of cars, electronics, and at more spending at restaurants. The upbeat report helps allay some concerns on Wall Street about persistently high inflation crimping consumer spending and about the possibility that the economy could slip into a recession.