Market builds on signs of strength
Construction spending and banks help provide foundation for stocks’ best showing in more than amonth.
new york » Stocks roared to their best day inmore than amonthTuesday as investors hit the “buy” button after some encouraging signs of strength in the U. S. economy.
Construction spending reached its highest level in eight years in January. Banks, the worst- performing sector of the market so far this year, led the way higher.
Stocks jumped at 10 a. m., when the Commerce Department reported that construction spending continued to rise in January. At the same time, a survey showed some signs of life in the beaten- down manufacturing sector. Those were good signs for the U. S. economy.
Banks rose the most, but big names in consumer and tech stocks also climbed, as did oil prices.
The Dow Jones industrial average jumped 348.58 points, or 2.11 percent, to 16,865.08. The Standard& Poor’s 500 index surged 46.12 points, or 2.4 percent, to 1,978.35. That was the biggest gain for the S& P 500, a widely used benchmark, since late January.
The Nasdaq composite index, which is heavily weighted with technology companies,
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Stocks have stumbled this year as investors feared for the health of theU. S. economy at the sametime that China, Europe and Japan are slowing or struggling.
Tuesday’s report showed that construction spending rose by the most in eight months.
Amanufacturing index had its best reading in six months, although activity is still declining.
Bank of America picked up 67 cents, or 5.4 percent, to $ 13.19, and JPMorgan Chase gained $ 2.90, or 5.2 percent, to $ 59.20, leading financial stocks higher.
The S& P 500’ s financial component has slumped about 9 percent this year, worse than any other industry, as investorsworry about loans that banks havemade to energy companies and low interest rates.
In recent months the strong dollar has hurt tech stocks, which do a lot of business outside the U. S., because it makes their products more expensive overseas and cuts into their revenue.
Those stocks climbed Tuesday, with the biggest gains going to familiar names.
Apple gained $ 3.84, or 4 percent, to $ 100.53. It had been more than a month since Apple stock closed above $ 100. Alphabet, the parent of Google, rose $ 24.95, or 3.5 percent, to $ 742.17. Microsoft picked up $ 1.70, or 3.3 percent, to $ 52.58, and Facebook stock added $ 2.90, or 2.7 percent, to $ 109.82.
KarynCavanaugh, senior markets strategist forVoya Investment Management, said investors abandoned tech and bank stocks as the market slumped in January and February.
“They’ve just been beaten with a stick this year,” she said. “Earnings have not been that bad and the companies’ financials are not that bad.”
Oil prices also moved higher. U. S. crude rose 65 cents, or 1.9 percent, to $ 34.40 a barrel in New York. Brent crude, the benchmark for international oils, rose 24 cents to $ 36.81 a barrel in London.
Natural gas, which closed at a 17- year low Monday, climbed 3 cents to $ 1.74 per 1,000 cubic feet.