Dow Rallies on Signs That Russia Won't Grab for More After Crimea Split
NEW YORK (TheStreet) -- U.S. stocks moved higher Tuesday after Russian President Vladimir Putin calmed markets by assuring there would be no further moves into Ukraine. Weaker-than-expected housing data released Tuesday isn't expected to see the Federal Reserve vary from its course of cutting bond purchases this week.
- The Dow Jones Industrial Average rose 0.55% to 16,336.19, while the S&P 500 was up 0.72% to 1,872.25. The Nasdaq added 1.25 to 4,333.31.
- Russian President Vladimir Putin provided reassurances in a speech Tuesday that he doesn't want see Ukraine split, following his move to fast-track the annexation of Crimea. "Don't believe those who try to frighten you with Russia and who scream that other regions will follow after Crimea," said Putin. "We do not want a partition of Ukraine; we do not need this." Putin earlier signed off on a draft bill to annex Crimea after a weekend referendum indicated that citizens of the peninsula broadly support parting from Ukraine. The U.S. and EU, which deemed the referendum illegal, have imposed sanctions in retaliation, but they've largely been perceived as toothless.
- February housing starts in the U.S. fell by 0.2%, compared with expectations of a 3.4% increase. Meanwhile, inflation for the month rose 0.1%, in line with expectations.
- The Federal Reserve kicks off its two-day policy meeting Tuesday with a rates announcement expected the following day. Goldman Sachs' chief economist Jan Hatzius forecast in a note that the Fed's exit from its current highly accommodative stance of monetary policy will be "a long time in coming." He continues to expect the first quarter of 2016 as the "liftoff date" for the fed funds target rate. The central bank is generally expected to continue trimming its asset purchases at the pace of $10 billion a month.
- European markets were gaining despite the softer-than-forecast German ZEW index of investor confidence. The FTSE in London was up 0.56% and the DAX in Germany was gaining 0.67%. Asian markets followed the stronger U.S. market action of the prior session. The Hong Kong Hang Seng settled up 0.51%, and the Nikkei 225 in Japan finished higher by 0.94%.
- Stocks seeing price action Tuesday included Microsoft
, which increased 3.9% for the biggest rise in the Dow. PVH and Tenet Healthcare were other top gainers, up 2.4% and 1.7%, respectively. Nasdaq OMX Group closed down 3.1% following reports that New York's attorney general has launched an investigation into whether exchanges provide high-frequency traders with unfair advantages. Hewlett-Packard rose 3.7% after analysts upgraded their view on the stock.
-- By Jane Searle, Andrea Tse and Joe Deaux in New York