Caption
Close
New York
Bank stocks jumped Tuesday on hopes that bigger profits are ahead, and U.S. indexes again pushed to record highs.
Stocks had been mostly lower when the day’s trading began, but indexes reversed course after Federal Reserve Chair Janet Yellen told a Senate committee that the central bank could raise interest rates as soon as next month. Bond yields jumped immediately afterward and fed through to shares of banks, which can benefit from higher rates by charging more for loans.
The Standard & Poor’s 500 index rose 9.33 points, or 0.4 percent, to 2,337.58 for its sixth straight day of gains. Earlier in the day, it was down as much as 0.3 percent. The Dow Jones industrial average rose 92.25 points, or 0.5 percent, to 20,504.41. The Nasdaq composite rose 18.62, or 0.3 percent, to 5,782.57. Slightly more stocks rose on the New York Stock Exchange than fell.
Stocks have been on a strong run driven by expectations for more help for businesses from Washington, an improving economy and stronger-than-expected corporate earnings. The S&P 500 is up 9.3 percent since Election Day.
A demonstration of how much optimism is feeding into markets: Small-business owners say they haven’t felt this encouraged in 12 years, according to a monthly survey released by the National Federation of Independent Business on Tuesday. Optimism made a sharp turn higher following the election, and more small businesses are saying they’re planning to hire.
Of course, such a high degree of excitement also leaves the possibility for disappointment if expectations aren’t met.
“The underlying momentum in the economy remains positive, so that gives us a positive bias toward the equity market, but we also know that there is a lot of volatility just around the corner,” Gayle said.
Yellen’s testimony helped the yield on the 10-year Treasury note rise to 2.47 percent from 2.43 percent late Monday. The yield on the 2-year Treasury rose to 1.24 percent from 1.21 percent, and the 30-year Treasury yield climbed to 3.06 percent from 3.03 percent.
General Motors jumped $1.72, or 4.8 percent, to $37.24 for one of the biggest gains in the S&P 500 following news that France’s PSA Group, maker of Peugeot and Citroen cars, is exploring a deal to buy Opel, GM’s money-losing European business.
Our editors found this article on this site using Google and regenerated it for our readers.
