Stocks turned in impressive gains on Tuesday, driving the U.S. benchmark index to a fresh five-year high and extending a rally that has lifted the S&P 500 for seven consecutive weeks.
The S&P 500 closed at 1530.94, up 11.15 points or 0.7 per cent – marking its biggest one-day gain in two weeks. The blue-chip Dow Jones industrial average closed at 14,035.67, up 53.91 points or 0.4 per cent. In Canada, the S&P/TSX composite index closed at 12,810.21, up 123.58 points or 1 per cent.
The gains followed big moves in Europe, where Germany’s DAX index surged 1.6 per cent. There, German investor confidence rose to its highest level since April 2010, fuelling hopes that the economic setbacks in the euro zone could be on the mend.
In the United States, the housing sector took a rare step back in what has been a steady stream of good news: The National Association of Home Builders reported that confidence among builders fell slightly this month to a reading of 46 – down from 47 in January and below expectations. PulteGroup Inc. fell 1.8 per cent and D.R. Horton fell 1.6 per cent.
The gains within the S&P 500 were broad: Energy stocks rose 1.2 per cent, consumer staples rose 1 per cent, while utilities, industrials and financials rose 0.9 per cent each.
Reports said that Office Depot Inc. and OfficeMax Inc. are discussing a merger. OfficeMax rose 20.9 per cent, while Office Depot rose 9.4 per cent. Staples Inc. also benefited from the rally, rising 13.1 per cent.
In Canada, Great-West Lifeco Inc. rose 2.4 per cent after it agreed to buy Irish Life Group Ltd. from the Irish government for $1.75-billion.
Among key commodities, crude oil rose to $96.66 (U.S.) a barrel, up 80 cents. Gold fell to $1,604.20 an ounce, down $5.30. Among Canadian commodity producers, Suncor Energy Inc. rose 1.3 per cent and Barrick Gold Corp. rose 0.2 per cent.