US Stock Market: DJIA, S&P500 and Nasdaq turns green in early trade on Tuesday
- Dow Jones Industrial Average surged 166 points or 0.5% to 32,417
- Big technology stocks helped much of the gains
- US crude oil are up more than 35% in 2022
Stocks moved higher in morning trading on Wall Street Tuesday as investors are prompted 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 Time zone. The benchmark index recovered some of its losses from yesterday’s fall of 3.2%. The Dow Jones Industrial Average surged 166 points or 0.5% to 32,417. The Nasdaq rose 1.6% to 11,882.89.
Health care companies also made heavy gains. Pfizer rose 1.7% as it moves to buy migraine treatment developer Biohaven Pharmaceuticals for $11.6 billion. Pfizer already owns a 2.6% stake in that company.
European markets also made solid gains. Germany's DAX gained 2.2%, France's CAC 40 grew 1.7% and the FTSE 100 in London rose 2%.
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Bond yields eased. The yield on the 10-year Treasury slipped to 2.97% from 3.08% late Monday.
Treasury yields have been rising and stocks have been highly volatile as Wall Street adjusts to Federal Reserve’s aggressive policy shift. The central bank is increasing key interest rates to curb rising inflation that threatens to crimp economic growth. Inflation is at its highest level in four decades.
The Fed hiked its key rate from close to zero, where it stood for much of the coronavirus pandemic. Last week, it signalled it will double the size of future increases from its usual margin.
High raw material costs, shipping and labour expenses have been cutting into corporate financial results and forecasts. Many companies have been raising prices on everything from clothing to food, raising worries that consumers will eventually reduce spending, which would hurt economic growth.
US 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 watching the latest round of corporate earnings reports with mixed results. Peloton plunged 13% as the former pandemic darling of investors reported another quarter of weak earnings. Food distributor Sysco grew 8.2% after beating Wall Street's estimates.
Wall Street will receive more details on inflation later this week. The Labor Department will release its report on consumer prices for April on Wednesday. On Thursday, it will release its report on producer prices or wholesale prices that impact businesses, for April.