NEW YORK—U.S. stocks rose on Tuesday, for the second consecutive day, driven by optimism coming out of Europe.
The Dow Jones Industrial Average advanced by 44.7 points, or 0.4 percent, while the S&P 500 Index rose 0.9 percent, or 10.6 points. All 10 S&P sectors were in the black on Tuesday. The technology-heavy Nasdaq Composite Index jumped 1.5 percent, or more than 37 points.
It was the first back-to-back days of gains in September. However, all major indices are still in the red for the year, with the Dow more than 4 percent down since Jan. 1.
Tuesday’s gains were mainly driven by growing optimism in Europe on ways to contain an escalating sovereign debt crisis, originally arising from Greece but having affected much larger economies in the eurozone.
Stocks were trading relatively flat until the afternoon, when news came that Chinese officials were considering deploying part of China’s foreign exchange reserves in an investment in Italian bonds.
The Financial Times first broke the news, saying that further discussions will take place this week.
The news was enough to propel the markets—which had been fixating on the European debt crisis—higher on Tuesday afternoon. Italy is the eurozone’s third biggest economy and it was feared that it would need a bailout if it does not close its budget gap.
Shares of French banking giants Societe Generale and BNP Paribas were higher on Tuesday, after being battered the past few trading sessions over access to funding. Management announced that their risks to Greek sovereign debt were manageable and the banks had adequate access to capital.
The Dow Jones Industrial Average advanced by 44.7 points, or 0.4 percent, while the S&P 500 Index rose 0.9 percent, or 10.6 points. All 10 S&P sectors were in the black on Tuesday. The technology-heavy Nasdaq Composite Index jumped 1.5 percent, or more than 37 points.
It was the first back-to-back days of gains in September. However, all major indices are still in the red for the year, with the Dow more than 4 percent down since Jan. 1.
Tuesday’s gains were mainly driven by growing optimism in Europe on ways to contain an escalating sovereign debt crisis, originally arising from Greece but having affected much larger economies in the eurozone.
Stocks were trading relatively flat until the afternoon, when news came that Chinese officials were considering deploying part of China’s foreign exchange reserves in an investment in Italian bonds.
The Financial Times first broke the news, saying that further discussions will take place this week.
The news was enough to propel the markets—which had been fixating on the European debt crisis—higher on Tuesday afternoon. Italy is the eurozone’s third biggest economy and it was feared that it would need a bailout if it does not close its budget gap.
Shares of French banking giants Societe Generale and BNP Paribas were higher on Tuesday, after being battered the past few trading sessions over access to funding. Management announced that their risks to Greek sovereign debt were manageable and the banks had adequate access to capital.
Best Buy Drops
The biggest drag on the S&P 500 Tuesday was electronics retailer Best Buy Corp., which saw its shares (NYSE: BBY) fall by almost 6.5 percent as the company missed its second-quarter financial targets.
Second-quarter revenues were $11.3 billion, consistent with the prior quarter, however, profits did not come close to expectations. Earnings per share were at 47 cents, which fell short of analyst expectations of 53 cents. Same-store sales were also 2.8 percent lower than the prior year.
The retailer reaffirmed its full-year outlook, but its fiscal second quarter’s results are anything but promising, especially with the important holiday shopping season coming up.
