FINANCIAL MARKETS
Banks and other financial companies led U.S. stock indexes sharply higher Tuesday, snapping an eightday losing streak for the Dow Jones industrial average.
The rally was broad, with materials and industrial companies among the biggest gainers. Energy stocks notched a big gain as crude oil prices moved higher.
The market got a boost from new data showing that consumer confidence in the U.S. hit its highest level since 2000.
Investor optimism that Congress and the White House are pivoting to tax cuts and other business-friendly policy proposals after spending recent weeks focused on health care also helped send the market higher, said JJ Kinahan, chief market strategist at TD Ameritrade.
The Dow rose 150.52 points, or 0.7 percent, to 20,701.50. The 30-company average’s decline in the previous eight consecutive days was its longest slide in more than five years. The Standard & Poor’s 500 index added 16.98 points, or 0.7 percent, to 2,358.57. The Nasdaq composite index gained 34.77 points, or 0.6 percent, to 5,875.14.
Bond prices edged lower. The 10-year Treasury yield rose to 2.42 percent from 2.38 percent.
Since Donald Trump’s presidential election win last November, investors have been optimistic that the administration would deliver on promises to slash taxes, loosen regulations for companies and institute other business-friendly policies. Republicans’ failure to repeal the Affordable Care Act last week dashed some of that optimism, pulling down stocks. But this week, Republicans appear to be shifting their focus back on tax cuts, among other issues.
Trading got off to a downbeat start Tuesday as investors weighed the latest batch of company earnings news. But the market livened up around midmorning when the Conference Board said its consumer confidence index rose this month to its highest level in more than 16 years. The index measures both consumers’ assessment of current conditions and their expectations for the future. Both improved this month.
Mortgage rates are rising, but that’s not expected to affect home sales yet because hiring is still strong, rates are low and there aren’t a lot of homes on the market. That’s a positive combination for homebuilders, many of which have seen their stocks move sharply higher this year. Benchmark U.S. crude rose 64 cents, or 1.3 percent, to close at $48.37 per barrel in New York. Brent crude, used to price international oils, climbed 58 cents, or 1.1 percent, to close at $51.33 a barrel in London.
Natural gas added 4 cents to $3.10 per 1,000 cubic feet, wholesale gasoline rose 2 cents to $1.64 per gallon and heating oil gained a penny to $1.52 per gallon.