Wall Street rebounds after a lengthy losing streak
Financial companies led U.S. stock indexes broadly higher on Tuesday as investors drew encouragement from new data showing strong gains in consumer confidence and U.S. home prices. Energy stocks also rose as crude oil prices headed higher. Utilities were the only laggard.
The Dow Jones industrial average ended the day 150 points higher, a gain of 0.7 percent, to close at 20,702. The S&P 500 index added 17 points, or 0.7 percent, to finish at 2,359. The Nasdaq composite index gained 35 points, or 0.6 percent, to end at 5,875. The rally allowed the Dow industrials to snap an eight-day losing streak, its longest slide in more than five years.
“The market is sort of in a holding pattern waiting for additional clarity from the administration on corporate tax reform,” said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank. “We do view the pivot away from health care reform on Friday as an overall net positive.”
General Motors (GM) gained 2.5 percent after its board voted to reject a proposal from investor David Einhorn to split the automaker’s stock into two classes. GM shares rose 85 cents to close at $35.56.
Darden Restaurants (DRI) jumped 9.3 percent after the owner of Olive Garden reported strong quarterly results and said it will buy the Cheddar’s Scratch Kitchen chain for $780 million. Cheddar has 165 locations in 28 states. Darden rose $7.04 to $82.62.
Red Hat (RHT) climbed 5.2 percent after the open-source software company reported strong sales and solid guidance for the current quarter. The stock added $4.29 to $86.48.
Carnival Cruise Line (CCL) rose 0.7 percent after the cruise line operator served up solid first-quarter results and a better-than-expected estimate for the second quarter. The stock, which closed at an all-time high on Monday, gained 39 cents to $59.26.
The Conference Board said its consumer confidence index rose this month to 125.6, its highest level in more than 16 years. Separately, the latest Standard & Poor’s Case-Shiller home price index showed that home prices rose at the fastest pace in more than two years in January. 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.
In Europe, Germany’s DAX was up 1.3 percent, while France’s CAC 40 was 0.6 percent higher. The FTSE 100 index of leading British shares was up 0.7 percent. Investors, particularly in U.K.-related assets, will have more to chew on Wednesday when the British government finally triggers the two-year process by which it leaves the European Union.
In Asia, Tokyo’s Nikkei 225 gained 1.1 percent. Hong Kong’s Hang Seng added 0.5 percent. Seoul’s Kospi rose 0.3 percent.
Benchmark U.S. crude rose 64 cents, or 1.3 percent, at $48.37 per barrel in New York. Brent crude, used to price international oils, climbed 61 cents, or 1.2 percent, to $51.51 a barrel in London.
The euro weakened to $1.0808 from $1.0868, while the dollar strengthened to 111.07 yen from 110.57 yen.
Bond prices edged lower. The 10-year Treasury yield rose to 2.41 percent from 2.38 percent.
The price of gold slipped 10 cents to settle at $1,255.60 an ounce. Silver rose 14 cents to $18.25 per ounce. Copper added 4 cents to $2.68 per pound.
