NEW YORK — The U.S. stock market marched higher Tuesday, giving the Standard &Poor’s 500 index its best day of the year.
Investors rallied behind an encouraging report on the Chinese economy as well as strong quarterly results from Apple and other big companies.
The market continues on its recovery from last week’s swoon and has now erased much of its losses over the last two weeks.
“I think it’s too early to call this a new rally, but I think there are definite signs that investors are gaining confidence again after last week’s volatility,” said Kristina Hooper, head of U.S. investment strategies at Allianz Global Investors.
The Standard &Poor’s 500 index added 37.27 points, or 2 percent, to 1,941.28. The Dow Jones industrial average rose 215.14 points, or 1.3 percent, to 16,614.81. The Nasdaq composite rose 103.40 points, or 2.4 percent, to 4,419.48.
This week so far has been a contrast to last week’s turbulence in many ways. Volatility is down, the S&P 500 index is on pace to have its best week of the year and the price of crude oil has stopped sliding. The bond market has also stabilized, with the 10-year Treasury note remaining around 2.20 percent for the last several days.
“Last week the main thing driving the market was the decline in oil, the Ebola scare and the rally in the 10-year Treasury note. All of those items have stabilized,” said Ian Winer, director of equity trading at Wedbush Securities.
That said, there’s still a chance for bumps ahead given that a meeting of the Federal Reserve is coming up next week where the central bank is expected to end its bond-buying economic stimulus program for good. Growth worries in Europe and China are still top of mind, and with U.S. corporate earnings season underway, the market’s direction could change quickly, traders and strategists said.
“Investors are likely to see more volatility, not less. We expected this to happen now that the Fed’s quantitative easing program is ending,” Hooper said. “We are in unusual times, so expect to see more of an outsized reaction in the market.”
Since falling to a six-month low last week, the stock market has now basically recovered nearly all of its losses. After closing at 1,862.49 on Oct. 15, the S&P 500 index has rallied more than 4 percent in four days.
