Wall Street stocks posted solid gains Tuesday following reports of a new Chinese stimulus plan as investors awaited Wednesday’s US Federal Reserve monetary policy announcement. AP
NEW YORK–Wall Street stocks posted solid gains Tuesday following reports of a new Chinese stimulus plan as investors awaited Wednesday’s US Federal Reserve monetary policy announcement.
The Dow Jones Industrial Average jumped 100.83 points (0.59 percent) to 17,131.97.
The broad-based S&P 500 gained 14.85 (0.75 percent) to 1,998.98, while the tech-rich Nasdaq Composite Index rose 33.86 (0.75 percent) to 4,552.76.
Analysts attributed the rally to reports that the People’s Bank of China is providing $81.4 billion in liquidity to China’s five largest banks.
“There’s a report that the Chinese central bank is boosting its stimulus program,” said Jack Ablin, chief investment officer at BMO Private Bank.
“That, combined with a perception that the Fed may not be in a hurry to raise interest rates,” moved markets, he said.
Apple fell 0.8 percent following reports that its new iPhone models may not be available in China until 2015.
Oil companies rallied as US oil prices jumped nearly $2 a barrel. Dow member ExxonMobil rose 1.2 percent, while ConocoPhillips advanced 1.7 percent.
Las Vegas Sands (-1.6 percent) and Wynn Resorts (-0.5 percent) fell on a dreary outlook for the gaming industry in Macau, where both firms have casinos. The Macau Business Daily said gaming revenues fell five percent between June and August compared with last year, labeling the 2014 period “the summer to forget.”
Health insurance company Humana surged 3.7 percent as it unveiled a $2 billion share repurchase authorization plan.
Botox-maker Allergan rose 1.0 percent as it reached an agreement with Valeant Pharmaceuticals and activist fund Pershing Square Capital Management over the terms of a special shareholder vote on Valeant’s unsolicited offer for Allergan. Allergan continues to oppose the deal.
Bond prices were mixed. The yield on the 10-year US Treasury held steady at 2.59 percent, while the 30-year advanced to 3.35 percent from 3.34 percent Monday. Bond prices and yields move inversely.