Stocks finished firmly higher on Tuesday, with all three major U.S. equity benchmarks recouping their year-to-date gains. The Dow climbed 407 points, while the S&P 500 rallied 1.5%, its best one-day performance since August. The Nasdaq Composite was up 2.1%, notching a new all-time closing high.
This built on Monday’s upbeat session, during which U.S. equities rebounded from last week’s slump. Risk sentiment was boosted after a report from ISM showed U.S. manufacturing activity expanded last month for the first time since July. Also adding to optimism was reassurance that China’s central bank would provide monetary stimulus to support its economy amid the coronavirus outbreak.
Ten of 11 S&P 500 sectors closed in positive territory, with Utilities the sole laggard. Technology shares paced gains, with Apple adding 3.3% on reports its major Chinese suppliers would resume full-scale operations on February 10. Elsewhere, Tesla jumped 13.7%, adding to Monday’s nearly 20% surge, its largest one-day advance since May 2013. Amazon rose 2.3%, closing above the coveted $1 trillion market cap for the first time. In earnings, Google parent Alphabet fell 2.5% after its holiday-quarter revenue fell short of Wall Street expectations.
Treasuries declined amid the perceived “risk on” mood. The yield on the 10-year note was up eight basis points to 1.60%. In commodities, WTI crude fell 1% to $49.61/barrel. COMEX gold declined 1.5% to $1,553.30/ounce, while copper snapped a 14-day losing streak. On the data front, factory orders advanced 1.8% in December, the biggest jump since August 2018.