NEW YORK: Wall Street was higher on Tuesday as investors rushed to pick up stocks after Britain’s decision to leave the European Union sparked a massive two-day selloff in global markets.
Banks, which were the worst hit since the referendum on Thursday, were among the most attractive stocks for bargain hunters. The S&P financial index rose 1.37%.
Morgan Stanley, Bank of America, Citigroup and JPMorgan were all up more than 2.5% while Goldman Sachs rose 1%.
Global equities commenced a free fall on Friday, losing more than US$2 trillion in market capitalisation, as investors scrambled to safe havens such as gold and the Japanese yen.
A rebound in oil prices on Tuesday signaled an appetite for riskier assets, while gold retreated.
The yield on 10-year US Treasury bonds turned positive after two days.
However, uncertainty over when and on what terms Britain will end its membership is expected to fuel volatility in the next few weeks.
“There’s some logic to the rally, but I don’t think there is any staying power,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
At 10:53am ET, the Dow Jones Industrial Average was up 168.61 points, or 0.98%, at 17,308.85.
The S&P 500 was up 21.9 points, or 1.09%, at 2,022.44.
The Nasdaq Composite was up 74.11 points, or 1.61%, at 4,668.55.
Nine of the 10 major S&P sectors were higher, led by a 1.75% gain in the energy index. Exxon rose more than 1%, giving the biggest boost to the S&P 500.
The S&P 500 is trading at about 15.9 times expected earnings, above the 10-year average of 14.7 times, according to Thomson Reuters StarMine.
Investors do not expect the US Federal Reserve to raise short-term interest rates anytime this year, but they will keep an eye on economic data that can steer the Fed’s sentiment.
Gross domestic product increased at a 1.1% annual rate, compared with 0.8% last month, the Commerce Department said on Tuesday.
The consumer confidence index rose 98.0 in May, compared to analysts’ estimate of 93.3.
Advancing issues outnumbered decliners on the NYSE by 2,557 to 386. On the Nasdaq, 2,296 issues rose and 357.
The S&P 500 index showed 10 new 52-week highs and no new lows, while the Nasdaq recorded 17 new highs and 21 new lows. - Reuters
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