Stocks Close Higher
Stocks rallied broadly Tuesday, as oil prices dropped below the $59-per-barrel mark and June consumer confidence came in stronger than expected. Stock groups that fell the most in the past three days, including cyclicals and small caps, lead the rise, according to Standard & Poor's MarketScope.
The Dow Jones industrial average gained 114.85 points, or 1.12%, to 10,405.63. The broader Standard & Poor's 500 index added 10.87 points, or 0.91%, to 1,201.56. The tech-heavy Nasdaq composite finished up 24.69 points, or 1.21%, to 2,069.89.
Looking ahead to Wednesday, the major event for the markets will be the start of the two-day meeting of the Federal Open Market Committee, the Federal Reserve's policy-setting. S&P economists expect the Fed to raise the Fed funds target rate a quarter of a percentage point at the close of the two-day meeting Thursday.
Also on Wednesday, the final revision of the first-quarter GDP will be released. The median estimate is for the figure to be revised to 3.7%, up from the earlier estimate of 3.5%, according to Action Economics.
Companies issuing earnings reports Wednesday include software outfit Oracle (ORCL ) and cereal maker General Mills (GIS ).
On Tuesday, June consumer confidence came in higher than expected at 105.8, up from 103.1 in May (which was revised up from the original report of 102.2). Economists polled by Action Economics were expecting the figure to come in at 104.5.
August crude oil settled down more than $2.34 to $58.20 per barrel on the New York Mercantile Exchange, ahead of Wednesday's weekly Energy Information Administration inventory report. Standard & Poor's MarketScope said that the price drop raised speculation that the energy market lacks the strength for crude to sustain an advance above $60.
In corporate news, chipmaker Advanced Micro Devices (AMD ) has filed an anti-trust lawsuit against chipmaking giant Intel (INTC ), saying its competitor uses coercion and other illegal tactics to stop companies from buying AMD microprocessors.
Britain's Financial Services Authority fined Citigroup (C ) the equivalent of about $25.4 million for a series of controversial bond trades it made last year that disrupted European government bond markets.
IBM (IBM ) announced after Monday's close that the Securities and Exchange Commission is conducting an informal investigation into its employee stock-option expenses in the first quarter.
Payroll service outfit Paychex (PAYX ) was helping to push the Nasdaq higher after reporting higher than expected fourth quarter net income of 27 cents a share.
Prices of Treasury issues fell Tuesday on the drop in oil prices and strong consumer confidence figures, as recent buying on a flight to safety was unwound, according to Standard and Poor's MarketScope. The yield on the benchmark 10-year note rose to 3.97%.
European stock markets closed higher Tuesday.
London's FTSE 100 index gained 46.90 points, or 0.93%, to 5,090.40, helped by lower oil prices. Oil groups BP and Shell Transport were higher after Morgan Stanley raised its rating on European energy stocks to attractive from in line.
In Germany, the DAX index closed up 33.64 points, or 0.74%, to 4557.46, even though German consumer confidence fell to 3.5 in June from 4.4 in May, the third consecutive slide and worse than expected. Adidas was among the gainers, on improved U.S. sales.
In Paris, the CAC 40 index finished up 36.65 points, or 0.88%, to 4,194.33, as French June business confidence rose unexpectedly to 99 from 96.0 and oil prices eased.
Asian markets finished higher Tuesday, rebounding from Monday's losses.
In Japan, the Nikkei index gained 99.55 points, or 0.87%, to 11,513.83.
In Hong Kong, the Hang Seng index gained 111.40 points, or 0.79%, to 14,287.44.