By DAMIAN J. TROISE and ALEX VEIGA
AP Business Writers
NEW YORK (AP) — Stocks closed higher on Wall Street Tuesday as technology stocks rallied following a weak start. The S&P 500 rose 1.6% and the Dow Jones Industrial Average rose 1.5%. The tech-heavy Nasdaq shook off an early loss and added 2.2%. Health care giant Johnson & Johnson rose 3.1% after reporting better-than-expected results and raising its dividend. Energy companies fell along with prices for crude oil and natural gas. Banks rose as Treasury yields continued to climb, which allows banks to charge higher interest rates on loans. The yield on the 10-year Treasury note rose to 2.94%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Stocks rose broadly on Wall Street in afternoon trading Tuesday as technology stocks rallied following a weak start.
The S&P 500 rose 1.7% as of 3:29 p.m. Eastern. The Dow Jones Industrial Average rose 517 points, or 1.5%, to 34,929. The tech-heavy Nasdaq shook off an early loss and was up 2.2%.
Technology stocks helped power the broad gains. Pricey valuations for many of the bigger technology companies give them more sway in directing the broader market higher or lower. Microsoft rose 1.7%.
Retailers and health care companies also rose. Amazon rose 3.6%. Johnson & Johnson rose 3.2% after reporting surprisingly good earnings while also raising its dividend.
Banks gained ground along with rising Treasury yields, which allow them to charge higher interest rates on loans. The yield on the 10-year Treasury rose to 2.93% from 2.85% late Monday. Bank of America rose 2.3%.
Smaller company stocks outpaced the broader market in a sign of confidence about economic growth. The Russell 2000 rose 2%.
Energy stocks lagged the broader market. U.S. crude oil prices fell 5.2% and natural gas prices slumped 8.2%.
Wall Street is increasingly focusing on the latest round of corporate report cards as more big companies release their earnings. Signature Bank jumped 8.3% after beating analysts’ expectations.
Dental products maker Dentsply Sirona slumped 12.1% after firing its CEO without giving a reason, along with issuing a profit forecast for the current quarter that was far below analysts’ estimates.
Netflix is on deck to report earnings after the market closes Tuesday. Railroad giant CSX will report earnings on Wednesday, along with Tesla. American Airlines and Union Pacific will report their results on Thursday.
The latest round of earnings comes as investors try to gauge how companies and consumers are dealing with rising inflation that has made everything from food to clothing and gas more expensive.
The conflict in Ukraine has added to those price pressures. The International Monetary Fund on Tuesday downgraded the outlook for the world economy this year and next, blaming Russia’s war in Ukraine for disrupting global commerce, pushing up oil prices, threatening food supplies and increasing uncertainty already heightened by the coronavirus and its variants.
Rising prices have prompted the Federal Reserve and other central banks to raise interest rates in order to help temper inflation’s impact. The Fed has already announced a quarter-percentage point rate hike and Wall Street expects a half-percentage rate hike at its next meeting. Currently, investors expect rate hikes to push the benchmark interest rate to a range between 2.5% and 2.75% by the end of the year, according to CME Group’s FedWatch tool.
“It’s going to be interesting to see how fast they hike rates from one meeting to the other,” said Shawn Cruz, head trading strategist at TD Ameritrade. “How we get to the end of the year is going to be something that will have a lingering effect of driving uncertainty in the market and continuing to drive volatility.”
Bond yields have been rising as Wall Street prepares for higher interest rates. The yield on the 10-year Treasury is the highest it’s been since late in 2018. Rising yields have also been raising pressure on an already tight housing market as mortgages rates rise and make borrowing more expensive. Wall Street will get more details on that impact when the National Association of Realtors releases its home sales report for March on Wednesday.
Veiga reported from Los Angeles.
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