The major domestic equity indexes opened higher on Tuesday, with the Dow Jones Industrial Average gaining more than 100 points, as investors went bargain hunting following a turbulent two weeks, while awaiting the annual central bankers meeting in Jackson Hole later this week.
The S&P fell 2.1 percent in the last two weeks, the largest such drop since the presidential election, on concerns over President Trump’s ability to legislate his pro-growth agenda. Still, the index is up about 14 percent since the election.
The central banking conference in Jackson Hole, Wyoming, starts Thursday, with Federal Reserve Chair Janet Yellen’s speech on Friday of key interest to market participants.
The speech will be closely watched for a steer on U.S. monetary policy, especially given the persistently low inflation rate, but central bank observers do not expect Yellen to give new guidance.
Meanwhile as the closing bell rang, the indexes posted their best one-day percentage gains in over a week, as l comments on tax reform and the debt ceiling raised investor optimism.
House Speaker Paul Ryan told CNN at a town hall on Monday that tax reform would be easier to pass than the failed healthcare overhaul because Republicans have built a consensus.
Separately, Senate Majority Leader Mitch McConnell said on Monday that there was “zero chance” that the United States will fail to raise the debt ceiling in September, allaying concerns that the United States is poised to default on its debt, according to media reports.
Absent major news from the White House and a standstill in tensions between the United States and North Korea, the two major factors that roiled the market in the past two weeks, it was back to high-flying tech shares once again.
Nearly all of the 11 major S&P sectors chalked up positive numbers. Technology shares led the advance, up 1.5 percent, notching their first gain in four sessions.
The S&P 500 materials index also rose more than 1 percent, enjoying its best day since mid-June, led by rising commodity and metals prices. Metals prices, including copper, zinc and nickel, ended higher against a backdrop of strong results for mining firms and talk of shortages in some metals.
Freeport-McMoRan gained 2.31 percent on news that Indonesia expects to strike an agreement this month to allow the miner to keep operating its copper mine in Papua.
Macy’s chalked up a gain of 4.56 percent, scoring its best day in nearly seven months, after announcing restructuring and job cuts.
DSW shares surged 17.46 percent after the footwear retailer reported a surprise rise in comparable sales.
Approximately 5.24 billion shares changed hands on the major domestic equity exchanges, a number that was below the 6.28 billion share daily average over the past 20 sessions.
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