A drop in the Consumer Price Index, which reinforced Wall Street’s expectations that the Federal Reserve would keep its monetary stimulus in place, added to the bullish sentiment.
The Standard Poor’s 500-stock index dropped 2.3 percent on Monday, its worst one-day percentage loss since Nov. 7. Still, the S. P. 500 is up 10.4 percent since the start of the year after enjoying a strong first-quarter run, partly as a result of the Fed’s continued stimulus efforts.
“Yesterday I think was a bit out of line,” said Brian Amidei, managing director at HighTower Advisors. “But I think the trend is that the market is consolidating, that we’re going to see a little bit of a pullback here over the next month and a half or so, and then we’ll get on to greener pastures.”
The Dow Jones industrial average jumped 157.58 points, or 1.08 percent, to close at 14,756.78. The S. P. 500 gained 22.21 points, or 1.43 percent, to 1,574.57. The Nasdaq composite index rose 48.14 points, or 1.50 percent, to 3,264.63.
The price of gold gained $26.20, or 1.93 percent, to $1,386.80 an ounce on Tuesday, after Monday’s sell-off, when it plunged 9.35 percent, or $140.40, its biggest one-day decline in more than 30 years. The steep drop in the prices of gold and other commodities helped set off the sharp sell-off in stocks on Monday.
Among the stocks moving higher on Tuesday, Coca-Cola rose 5.7 percent to $42.37, giving the Dow its biggest boost. In reporting earnings on Tuesday, Coca-Cola, the world’s largest soft drink maker, reported a higher-than-expected profit and a deal to unload some distribution territory to five independent bottlers in the United States.
The stock of another Dow component, the health care company Johnson Johnson, gained 2.1 percent, to $83.44, after it reported better-than-expected first-quarter earnings.
Earnings for companies in the S. P. 500 are now expected to have risen 1.8 percent in the first quarter, based on actual results from 42 companies and estimates for the rest, up from a recent estimate of 1.1 percent growth.
The Dow Jones Transportation Average, often an indicator of investors’ perception of the economy, gained 2.2 percent.
After the closing bell, shares of Yahoo fell 4.9 percent to $22.62 in after-hours trading after the company reported earnings that were primarily bolstered by its investments abroad rather than its operations.
Among other earnings, Goldman Sachs reported higher quarterly profit but said revenue from client trading fell 10 percent, raising questions about the health of its biggest moneymaker. Goldman’s shares fell 1.6 percent to $144.10.
Analysts’ positive views on basic materials companies helped stocks in that sector. International Paper gained 4.7 percent, to $47.47, and Vulcan Materials jumped 6.8 percent, to $48.69.
In the bond market, interest rates moved higher. The price of the Treasury’s 10-year note fell
10/32, to 102 26/32, while its yield rose to 1.72 percent from 1.69 percent late Monday.
Article source: http://www.nytimes.com/2013/04/17/business/daily-stock-market-activity.html?partner=rss&emc=rss
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