Stocks rise on Wall Street a day after broad sell-off
Stocks rose in morning trading on Wall Street Tuesday as investors are tempted by lower prices a day after the S&P 500 hit its lowest level in more than a year
NEW YORK — Stocks rose in morning trading on Wall Street Tuesday as investors are tempted by lower prices a day after the S&P 500 hit its lowest level in more than a year.
The S&P 500 rose 1% as of 10:11 a.m. Eastern. The benchmark index clawed back some of its losses from a day prior when it slumped 3.2%. The Dow Jones Industrial Average rose 166 points, or 0.5%, to 32,417 and the Nasdaq rose 1.6%.
Big technology stocks, which have been swinging sharply both up and down recently, led the gains. Apple rose 2.5% and Microsoft rose 2.8%.
Health care companies also made solid gains. Pfizer rose 1.7% as it moves to buy migraine treatment developer Biohaven Pharmaceuticals for $11.6 billion. Pfizer already owns a portion of that company.
Indexes in Europe also made solid gains. Germany’s DAX rose 2.2%, France’s CAC 40 rose 1.7% and the FTSE 100 in London gained 2%.
Bond yields eased. The yield on the 10-year Treasury fell to 2.97% from 3.08% late Monday.
Treasury yields have been generally rising and stocks have been extremely volatile as Wall Street adjusts to the Federal Reserve’s aggressive policy shift. The central bank is raising interest rates from historic lows to fight persistently rising inflation that threatens to crimp economic growth. Inflation is at its highest levels in four decades.
The central bank has raised its key rate from close to zero, where it sat for much of the coronavirus pandemic. Last week, it indicated it will double the size of future increases from its usual margin.
Higher prices on raw materials, shipping and labor have been cutting into corporate financial results and forecasts. Many companies have been raising prices on everything from clothing to food, raising concerns that consumers will eventually cut spending, which would hurt economic growth.
Russia’s ongoing invasion of Ukraine has only increased worries about rising inflation. The conflict pushed already high oil and natural gas prices even higher, while putting more pressure on costs for key food commodities like wheat and corn. U.S. crude oil prices were relatively stable on Tuesday but are up more than 35% in 2022. Wheat prices are up more than 40%.
Investors are also still reviewing the latest round of corporate earnings with mixed results. Peloton tumbled 13% as the former pandemic darling of investors reported another quarter of lackluster earnings. Food distributor Sysco rose 8.2% after beating Wall Street’s financial forecasts.
Wall Street will get some more details on inflation later this week. The Labor Department on Wednesday will release its report on consumer prices for April. On Thursday, it will release its report on producer prices, or wholesale prices that impact businesses, for April.