Wall Street swings back as stocks, yields tick up

Stocks closed higher on Wall Street, recovering some losses from last week and pulling closer to record highs.

Wall Street kicked off a holidayshortened week with broad gains for stocks Tuesday, as the market recovered most of its losses from last week.

The S&P 500 gained 0.8%, pulling to within 1% of its record high set earlier this month. About 60% of the companies in the benchmark index rose. Technology, communication services and health care stocks accounted for much of the rally, though energy sector companies notched the biggest gain. Treasury yields rose.

The gains marked a reversal from last week, when stocks ran out of steam after a strong start to the year. Markets have been rising on enthusiasm about a coming economic recovery as COVID-19 vaccines roll out and Washington gets set to try for another massive round of stimulus for the economy.

Janet Yellen, President-elect Joe Biden’s nominee to be Treasury Secretary, is calling on Congress to do more to boost the economy.

The S&P 500 rose 30.66 points to 3,798.91. The Dow Jones Industrial Average added 116.26 points, or 0.4%, to 30,930.52. The Nasdaq composite gained 198.68 points, or 1.5%, to 13,197.18.

Traders continued to bid up shares in smaller companies, a sign of confidence in the prospects for future economic growth. The Russell 2000 index picked up 27.94 points, or 1.3%, to 2,151.14.

U.S. markets were closed Monday in observance of Martin Luther King Day.

The case for more economic stimulus from the government has been rising by the day. Dismal reports have piled up showing how the worsening pandemic has more workers applying for jobless benefits and shoppers feeling less confident.

Besides stocks, the optimism about an eventual acceleration for the economy and another round of stimulus have also helped push Treasury yields up sharply recently.

The yield on the 10-year Treasury climbed to 1.10% from 1.08% late Friday. Higher rates could eventually add pressure on stocks, underscoring more how expensive stocks have become relative to the profits that companies are producing.

But some areas of the stock market could benefit, including banks. Higher rates and a healthier economy would allow them to earn bigger profits from making loans.

Bank of America slipped 0.7% after reporting a weaker profit for the last three months of 2020 than a year earlier, though its results were still above analysts’ expectations. T

he bank also said expectations for a healing economy mean it doesn’t need to hold onto as much in reserves to cover for potentially bad loans.

Goldman Sachs, State Street and Halliburton also reported stronger results for the end of 2020 than analysts expected as earnings reporting season picks up pace. Wall Street is expecting a relatively weak showing across the S&P 500 this time around, with another sharp drop in earnings per share. But analysts expect growth to rebound powerfully through 2021.

General Motors jumped 9.7% for the biggest gain in the S&P 500 after saying its self-driving car company, Cruise, will work with Microsoft to develop autonomous, all-electric vehicles. GM, Microsoft, Honda and other investors will also pump $2 billion into Cruise, valuing it at $30 billion. GM bought Cruise in 2016. Microsoft shares rose 1.8%.

Western Union rose 2% after it said it will begin offering money transfer and other services at more than 4,700 Walmart stores, beginning in the spring. Walmart slipped 0.9%.

Netflix surged in after-hours trading after the video streaming giant reported results that blew past Wall Street’s forecasts.

NOV slid 5.9% for one of the biggest losses in the S&P 500 after saying it expects to report weaker revenue and results for the end of 2020 than it had earlier forecast.

The energy company said the resurgence of COVID-19 infections pushed customers to slow their orders.