Wall Street gained on Tuesday, with the S&P 500, Dow industrials and Russell 2000 setting record closing highs, as technology stocks bounced back and investors positioned for an expected Federal Reserve interest rate hike. The S&P 500 technology sector rose 0.9 percent, recovering from its biggest two-day decline in nearly a year that also weighed on the broader market. Big tech names, such as Microsoft and Facebook, pushed the S&P 500 higher.”I think the fall the last two days has been due to psychology not to any fundamentals, and today you’re seeing some people step back in and buy again,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “Fundamentals look good.”Tech has led the benchmark S&P 500’s 9-percent rally this year, and its recent swoon has sparked speculation that investors may be rotating into other swaths of the market that have lagged in 2017, such as financials and energy.
Financials gained 0.4 percent on Tuesday, while energy gained 0.7 percent. Materials were the top gaining sector, rising 1.3 percent.Tuesday’s market action reflected “a continuation of running up some of the areas that have not participated over the course of the last few months, in combination with some speculation that the Fed is going to be more resolute about raising rates than investors had begun to anticipate in the bond market,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
The Dow Jones Industrial Average rose 92.8 points, or 0.44 percent, to 21,328.47, the S&P 500 gained 10.96 points, or 0.45 percent, to 2,440.35 and the Nasdaq Composite added 44.90 points, or 0.73 percent, to 6,220.37.Traders are overwhelmingly expecting an interest rate increase when the Fed concludes its two-day meeting on Wednesday.The central bank is scheduled to release its decision at 2 p.m EDT (1800 GMT) on Wednesday with a news conference to follow from Fed Chair Janet Yellen.
Financials, which tend to benefit when rates are rising, also climbed after the U.S. Treasury Department announced a plan to upend the country’s financial regulatory framework, which would grant many items on Wall Street’s wishlist.In corporate news, Cheesecake Factory shares fell 9.9 percent after the restaurant chain warned of a decline in comparable store sales.Advancing issues outnumbered declining ones on the NYSE by a 2.39-to-1 ratio; on Nasdaq, a 1.89-to-1 ratio favored advancers.About 6.4 billion shares changed hands in U.S. exchanges, below with the 6.8 billion daily average over the last 20 sessions.