By Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks ended higher on Tuesday, led by a 2% gain in the Nasdaq, as shares of technology and other big growth names rebounded from recent losses and Nike rose after it reported upbeat results.
Financial shares also were among the day’s best performers as the benchmark 10-year Treasury yield climbed to 2.368%, with the S&P 500 bank index up 2.5%.
Every S&P 500 sector but energy ended higher on the day. The three major indexes have gained in five of the last six sessions.
The Federal Reserve last week raised the federal funds rate by a quarter of a percentage point from the near-zero level, and Fed officials are doing little to downplay rising market expectations the U.S. central bank will raise rates by half a percentage point in May to tame inflation.
While higher borrowing costs are a negative for consumers and many businesses, they help to boost the profit outlook for banks.
Apple Inc, Microsoft Corp, Amazon.com Inc, Alphabet Inc and Tesla Inc gave the biggest boosts to the S&P 500 and the Nasdaq. The S&P 500 technology index rose 1.4% on the day, but remained down 10% for the quarter so far, among the sharpest declines of the major sectors.
With the recent lows, “you sort of really did wash out the sellers,” said Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis. “Now you’re seeing even the old leadership bounce a little bit, giving people a little support that maybe the worst is over.
“Underneath all of it is that economic and earnings data have remained fairly good.”
Nike Inc shares rose 2.2% after the company beat quarterly profit and revenue expectations and said manufacturing issues pinching sales over the past six months were in the rear view mirror.
The Dow Jones Industrial Average rose 254.47 points, or 0.74%, to 34,807.46, the S&P 500 gained 50.43 points, or 1.13%, to 4,511.61 and the Nasdaq Composite added 270.36 points, or 1.95%, to 14,108.82.
Tesla Inc jumped 7.9% as the electric-car maker delivered its first German-made cars to customers at its Gruenheide gigafactory.
On Monday, Fed Chair Jerome Powell said the central bank must move “expeditiously” to raise rates. When asked what would prevent the central bank from raising rates by half a percentage point at the May 3-4 policy meeting, he responded: “Nothing.” Powell is slated to speak again on Wednesday.
Investors were still keeping a close eye on the Ukraine-Russia conflict, with Ukrainian officials saying the besieged port city of Mariupol is under continuous bombardment as Russian forces redouble their efforts to capture it.
Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 2.53-to-1 ratio favored advancers.
The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 60 new highs and 37 new lows.
Volume on U.S. exchanges was 12.14 billion shares, compared with the 14.5 billion average for the full session over the last 20 trading days.
(Reporting by Caroline Valetkevitch in New York; Additional reporting by Devik Jain and Amruta Khandekar in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)
