Despite staying weak till noon and suffering a setback after a subsequent recovery, U.S. stocks closed on a buoyant note on Tuesday thanks to strong buying at several counters.
The major averages all ended with impressive gains. The Dow ended higher by 265.67 points or 0.78 percent at 34,156.69. The S&P 500 closed up 52.92 points or 1.29 percent at 4,164.00, while the Nasdaq climbed 226.34 points or 1.9 percent to 12,113.79.
Positive reaction to Federal Reserve Chair Jerome Powell’s remarks at the Economic Club of Washington lifted the market up.
In a Q&A session at the Economic Club of Washington, Powell told Carlyle Group co-founder David Rubenstein that he expects 2023 to be a year of “significant declines in inflation.”
Powell said inflation is beginning to ease, though he expects it to be a long process and cautioned that interest rates could rise more than markets expect if the economic data doesn’t cooperate.
“The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy,” Powell said during an event in Washington, D.C. “But it has a long way to go. These are the very early stages.”
Powell spoke in a question-and-answer session at the Economic Club of Washington, D.C. with Carlyle Group co-founder David Rubenstein.
Microsoft shares gained nearly 4 percent. Boeing surged 3.8 percent, and Chevron climbed 2.6 percent.
Walt Disney, Merck, Travelers Companies, Apple, Intel, Salesforce.com, JP Morgan Chase, American Express, Goldman Sachs and Walgreens Boots Alliance also posted impressive gains.
Hertz climbed 7.5 percent, and DuPont shares surged 7.8 percent on stronger than expected results.
Verizon, Home Depot, P&> and Caterpillar ended weak. Chegg plunged more than 17 percent after the company came out disappointing guidance.
In economic news, data showed U.S. trade deficit widened to $67.4 billion in December 2022, from a downwardly revised $61 billion in November.
Exports increased 17.7 percent in the month, while imports jumped 16.3 percent.
In overseas trading, Asian stocks ended mixed on Tuesday and the dollar rally paused as investors assessed the outlook for growth and interest rates in developed economies.
Chinese shares rebounded on continued optimism surrounding China’s reopening with the world.
European stocks closed on a mixed note with investors largely making cautious moves amid concerns about slowing global economy, and geopolitical tensions.
The pan European Stoxx 600 climbed 0.23 percent. The U.K.’s FTSE 100 gained 0.36 percent, while Germany’s DAX and France’s CAC 40 edged down 0.16 percent and 0.07 percent, respectively.
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