Stocks Rebound Sharply; S&P 500, Nasdaq Rise Over 1%
NEW YORK ( TheStreet) -- Major U.S. equity indices rebounded Tuesday as investors cheered the growing services sector and took cues from strength in the European markets.
The Dow Jones Industrial Average closed up 99 points, or 0.7%, to 13,979.
Breadth was highly positive, with winners outnumbering losers 28 to two. The most prominent blue-chip advancers were Bank of America (BAC) , UnitedHealth(UNH) , Hewlett-Packard(HPQ) and JPMorgan(JPM) .
Walt Disney (DIS) shares rose 0.7% on Tuesday. The entertainment giant reported fiscal first-quarter earnings of 77 cents a share on $11.34 billion in revenue. Wall Street analysts expected earnings of 76 cents a share on revenue of $11.21 billion after the close.
The VIX, known as Wall Street's fear gauge, slid below 14.
In the broader market, all sectors were in the green. The biggest gainers were technology, capital goods, consumer cyclicals and financials.
Volumes totaled 3.59 billion shares on the New York Stock Exchange and 2.14 billion on the Nasdaq. Advancers outpaced decliners by a ratio of 2.7-to-1 on the Big Board and 2.6-to-1 on the Nasdaq.
Major U.S. stock averages slumped Monday, dragged down by political uncertainties in Europe and disappointing factory orders here at home.
"Now one day does not make a trend," said Joe Cusick, senior market analyst at optionsXpress, referencing Monday's declines and January's positive returns. Cusick noted that, historically, if January ends in the green, the year typically ends in positive territory.
"Actually there have only been four years in the S&Ps when January showed a positive start that the end of year performance was not better than the January return," he said.
On Tuesday, the ISM Non-Manufacturing Index showed a decline to an as- forecast 55.2% in January from a downwardly revised 55.7% in December, indicating continued growth at a slightly slower rate in the U.S. services sector. The employment index in the non-manufacturing ISM report increased 2.2 percentage points to 57.5%, indicating growth in employment for the sixth straight month.
"Despite the decline in the month, the January
Survey respondents expressed a measuredly optimistic view on the business climate, with one in the retail trade saying that there seems to be "some stabilization in recent months. Business seems a little more confident, and consumers are participating once again."