NEW YORK — The stock market is desperately looking for good news. NEW YORK — The stock market is desperately looking for good news. ADVERTISING On Tuesday, oil prices fell, the euro sank to a 22-month low, and the yield
NEW YORK — The stock market is desperately looking for good news.
On Tuesday, oil prices fell, the euro sank to a 22-month low, and the yield on the U.S. government’s 10-year Treasury note fell near a historic low after a report suggested Spain will have more trouble repaying its debts.
But stocks rose anyway. In fact, they had one of their best days in an otherwise dreary month. Investors focused on hopes China is poised to rev up its economic growth machine and that upcoming elections in Greece will help the country stay in the euro.
“The overriding news isn’t that great,” said Robert Pavlik, chief market strategist at investment advisors Banyan Partners. “But Greece and China are taking the pressure off the market in the short term.”
Gains in industrial stocks that depend heavily on the Chinese economy, like Caterpillar and Alcoa, helped push the Dow Jones industrial average up 125.86 points. The Dow closed at 12,580.69, up 1 percent.
China is the largest market for aluminum, which Alcoa makes, and Caterpillar recently said it is aggressively courting China to sell its construction equipment. Both stocks gained 3 percent.
It was only the fifth gain for the Dow this month. The index is down 4.8 percent for May and is headed for its first monthly loss since September. The main culprits behind the decline have been the increasing likelihood Greece will drop out of the euro currency and a worsening of Spain’s financial condition.
Facebook plunged 10 percent to $28.84, shaving $25 billion off the company’s market value in its first seven days of trading. The glitch-plagued IPO has drawn scrutiny from regulators and ire from disgruntled investors who had trouble executing trades.
Blackberry maker Research in Motion plunged 11 percent in after-hours trading to $10 after the company said it expects to post a loss in its first quarter amid tough competition in the smartphone business.
The Standard & Poor’s 500 index closed up 14.60 points at 1,332.42, and the Nasdaq composite added 33.46 points to 2,870.99.
U.S. markets were closed Monday for Memorial Day.
Oil prices fell below $91 after ratings agency Egan Jones downgraded Spain’s debt Tuesday. Crude oil prices have been dropping steadily from $106 four weeks ago amid signs of slowing global growth.
Analysts have been concerned Spain and other weak European economies could drag the European Union into recession this year. It would lead to lower demand from Europe, a region that consumes 16 percent of the world’s oil. It also could harm trading partners like the U.S. and China and slow down global demand for oil.
The same worries flagged in the report sent the euro to $1.246, its lowest point against the dollar since July 2010. Investors fled to the safety of U.S. government bonds, sending the yield on benchmark 10-year Treasury note as low as 1.71 percent, near an all-time low.
Stock investors on Tuesday appeared relieved with news from Greece that a party in favor of abiding by the terms of the country’s financial rescue could win in national elections next month. That could avoid a catastrophic rift with Greece’s international creditors and keep the struggling country within the euro zone.
There was also some positive news from the beleaguered U.S. housing market. The Standard & Poor’s/Case-Shiller report found home prices increased in 12 of the 20 cities it tracks. The increase in March from the month before was the first in seven months. It was the latest evidence of a slow recovery taking shape in the troubled housing market.
In Europe, concerns Spain’s ailing banking sector might worsen the European debt crisis sent the Spanish stock market to nine-year lows. Other European markets rose.
Spain’s banks are sitting on huge amounts of soured investments in the country’s imploded real estate market. That has led to the recent nationalization of Bankia, the country’s fourth-largest lender. Bankia revealed last week it needs far more money in state aid than previously expected, $23.8 billion.
Madrid’s Ibex index fell 2.3 percent and Bankia dropped another 13.6 percent.
