Wall Street chalks up strongest day in a month | Reuters - Firstpost
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Wall Street chalks up strongest day in a month | Reuters

Updated: Mar 2, 2016 05:15 IST

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Wall Street enjoyed its strongest session in a month on Tuesday, led by financial and technology stocks after encouraging U.S. factory and construction data suggested the world's biggest economy was regaining momentum.

The S&P 500 closed 2.39 percent higher, leaving the index down 3 percent in 2016 after partly recovering in recent weeks from a steep selloff in January. A rally in Apple shares helped give the Nasdaq Composite its strongest day since August.

While manufacturing activity contracted in February, steadying new orders growth and improving inventories offered signs of stability.

Construction spending in January surged to the highest since 2007, while strong auto sales also boosted sentiment.

The data strengthened expectations the U.S. economy is gaining steam after slowing in the fourth quarter.

"What was the spin since last August? That the Chinese slowdown is going to affect the rest of the world," said Donald Selkin, chief market strategist at National Securities in New York. "Now we're seeing there's virtually no chance we're going to have a recession."

Swings in the price of oil have been tightly linked to stock prices in recent months, and on Tuesday they continued their recovery from recent lows, with U.S. crude CLc1 up 2 percent.

In a sign that investors are becoming more confident, the CBOE Volatility index .VIX fell 13.87 percent to its lowest since Dec. 31.

The Dow Jones industrial average .DJI surged 2.11 percent to end at 16,865.08 points.

The S&P 500 .SPX jumped 46.12 points to 1,978.35 and the Nasdaq Composite .IXIC climbed 2.89 percent to 4,689.60.

The S&P 500 and the Dow both had their best one-day percentage gain since Jan. 29. The S&P moved back above its 50-day moving average, seen as a sign of improving sentiment.

Nine of the 10 major S&P sectors rose 1 percent or more.

Financials .SPSY surged 3.54 percent, with Morgan Stanley (MS.N) and Citigroup (C.N) both rising over 5 percent. The sector is the worst performer this year, down about 9 percent, due partly to fears of debt defaults by energy companies.

The technology sector .SPLRCT rose 3.08 percent. Apple (AAPL.O) gained 3.97 percent, giving the biggest boost to the S&P and the Nasdaq.

Utilities .SPLRCU, seen as a safe haven in times of trouble, fell 0.49 percent.

Fiat Chrysler (FCAU.N) rose 7.15 percent and Ford (F.N) added 4.64 percent after strong U.S. auto sales in February defied fears of a slowdown after a record 2015.

Tesla Motors (TSLA.O) dropped 2.91 percent to $186.35 after influential short seller Citron Research predicted the electric car maker would fall to $100 by year-end due to supply and demand problems.

Advancing issues outnumbered decliners on the NYSE by 2,550 to 533. On the Nasdaq, 2,117 issues rose and 690 fell.

The S&P 500 index showed nine new 52-week highs and no new lows, while the Nasdaq recorded 38 new highs and 49 new lows.

About 8.8 billion shares changed hands on U.S. exchanges, in line with the 8.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by James Dalgleish and Nick Zieminski)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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