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Stocks rise, led by tech companies, banks

Tech companies and banks rose shares on Wall Street Tuesday, offsetting most of the market’s losses from a wide sell-off the day before.

The rally, which lost some of its momentum in the last hour of trading, pushed the S&P 500 up 1.1 percent. Around 73 percent of the companies in the benchmark index rose.

Technology stocks did much of the heavy lifting for the broader market, which helped push the Nasdaq up 1.3 percent, its largest gain since Aug. 23. The chip manufacturer Nvidia increased by 3.6 percent and Microsoft by 2 percent.

Communications stocks also performed solidly after losing ground the previous day. Netflix grew by 5.2 percent. Utilities and real estate stocks were the only laggards in the S&P 500.

The gains mark a reversal in the overall performance of the market over the past few weeks. The S&P 500 fell 4.8 percent in September, its first monthly decline since January. After steadily losing ground from its all-time high on September 2, the index slid below its 100-day moving average of 4,354 on Tuesday. That sends a signal to traders that the index “has reached a good level of support for stocks to trade higher,” said Terry Sandven, chief equity strategist at US Bank Wealth Management.

“Today’s activity is primarily a response to the weakness we’ve experienced over the past 10 days or so,” he said.

The S&P 500 rose 45.26 points to 4,345.72. The Dow Jones Industrial Average gained 311.75 points, or 0.9 percent, to 34,314.67 and the Nasdaq gained 178.35 points to 14,433.83.

Small company stocks also rose. The Russell 2000 Index rose 10.89 points, or 0.5 percent, to 2,228.36 points.

Bond yields gained ground. The 10-year Treasury rose from 1.49 percent late Monday to 1.53 percent. Rising bond yields helped banks, which rely on higher yields, to charge more lucrative interest rates on loans. Bank of America was up 2 percent and Citigroup was up 1.7 percent.

Energy prices continued to rise. US oil rose 1.7 percent to $ 78.93 a barrel. Natural gas futures rose 9.5 percent. Rising energy prices have pushed gasoline prices up steadily. The average price for a gallon of gas in the US is $ 3.20, according to the AAA, more than $ 1 more than a year ago.

The rise in energy prices helped the stocks of oil companies rise. Chevron was up 1.1 percent and Hess was up 1.6 percent.

A wide range of consumer services-focused companies gained ground following an encouraging refresh in the services sector, most of the US economy. The Procurement Management Institute reported that the sector continued to grow in September, faster than economists expected. Chipotle was up 1.4 percent and Carmax was up 3 percent.

The market has been choppy for weeks as investors try to gauge how the economy will continue to recover from COVID-19 and the highly contagious Delta variant that is hurting consumer spending and employment growth. Inflation concerns have caused much of the up and down shifts for tech companies and the broader market.

Rising inflation has led companies from Nike to Sherwin-Williams to lower their sales forecasts and warn investors that higher costs will hurt financial results. Disruptions and delays in the supply chain, along with rising raw material costs, are among the main problems businesses face as they try to continue to recover from the effects of the pandemic.

The ongoing pandemic and global supply chain problems caused the International Monetary Fund to downgrade its forecast for global growth this year.

Still, Wall Street still expects solid corporate earnings growth as the third quarter earnings season kicks off later this month. According to FactSet, S&P 500 companies will see earnings up 27.7 percent for the July-September quarter year over year.

“We are now at the doorstep of the third quarter releases which we believe will show rising earnings, and that is a foundation for stocks to trend higher,” said Sandven.

Facebook grew by 2.1 percent. The stock fell nearly 5 percent on Monday as the company suffered a global default and faced political ramifications after a former employee told 60 Minutes that the company consistently chose its own interests over the public good. Former staff member Frances Haugen testified in front of the congress on Tuesday.

The equity markets in Europe rose, while the markets in Asia were mostly down.

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