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Wall Street stocks closed higher and Treasury yields dipped on Tuesday as upbeat earnings and better-than-expected factory data stoked a risk-on rally.
Building on Monday’s broad gains, the S&P 500 led the major U.S. stock indexes higher to end the session up nearly 1% or more, with sectors across the board advancing.
Meanwhile benchmark Treasury yields were last lower, having oscillated throughout the day.
“The market was a bit oversold leading into Monday, and people were worried of what was going to happen over the weekend. People walked into the week feeling a little better,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Conn. “You’re getting a combination of short covering and fear of missing out.”
Better-than-expected quarterly results from Goldman Sachs Group Inc (GS.N), Johnson & Johnson (JNJ.N) and Lockheed Martin (LMT.N) set the tone, with robust industrial output data providing signs of economic strength even as central banks tighten monetary policy to tackle inflation.
The belief that “a recession is coming and the Fed is going to be raising interest rates, with the hope that maybe a pause is going to be coming something next year,” is now baked into the market, Pavlik said. “Without all that weight, the market can rise higher after being sold off.”
The Dow Jones Industrial Average (.DJI) rose 337.98 points, or 1.12%, to 30,523.8, the S&P 500 (.SPX) gained 42.04 points, or 1.14%, to 3,719.99 and the Nasdaq Composite (.IXIC) added 96.60 points, or 0.9%, to 10,772.40.
Monday’s policy reversal from British finance minister Jeremy Hunt’s continued to buoy investor sentiment.
European shares extended their policy U-turn rally – with an assist from the tech sector – to close modestly higher on the day.
The pan-European STOXX 600 index (.STOXX) rose 0.34% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 1.13%.
