Stocks rose on Tuesday, recovering from sharp losses the day before that had sent the U.S. benchmark index to a one-month low over renewed concerns about the European debt crisis.
The S&P 500 closed at 1496.94, up 9.09 points or 0.6 per cent – though about a third of what it lost in Monday’s session, when it suffered its worst dip since early November.
The blue-chip Dow Jones industrial average closed at 13,900.13, up 115.96 points or 0.8 per cent. In Canada, the S&P/TSX composite index closed at 12,660.44, up 9.57 points or less than 0.1 per cent.
The moves followed assurances from Ben Bernanke, chairman of the Federal Reserve, that the central bank’s view on stimulus remains the same. In testimony before the Senate Banking Committee, Mr. Bernanke said asset purchases – known as quantitative easing, or QE – were not raising concerns about risk-taking or inflation.
Recently released minutes from the last Fed policy meeting had suggested that some committee members were growing concerned about the costs associated with quantitative easing, raising worries that Fed stimulus could end sooner than expected.
Meanwhile, the Conference Board’s consumer confidence index rose to 69.6 in February, up from a revised 58.4 in January and well-ahead of expectations.
The U.S. housing market also looked upbeat. New home sales in January rose 15.6 per cent, month-over-month, topping expectations. As well, the S&P/Case-Shiller home price index for 20 U.S. cities rose 6.84 per cent in December, year-over-year.
The gains boosted U.S. homebuilding stocks: PulteGroup Inc. rose 5.7 per cent and D.R. Horton rose 4.1 per cent.
As well, Home Depot rose 5.7 per cent after it reported a 32 per cent rise in its quarterly earnings and a 7 per cent gain in sales for stores open for at least one year.
Bank of Montreal rose 1.3 per cent after it reported a first-quarter profit of $1.53 a share, down from $1.65 a year ago. However, earnings beat expectations on an adjusted basis, and the bank boosted its quarterly dividend by 2 cents.
Among key commodities, gold showed the biggest gain of the year, rising to $1,615.50 (U.S.) an ounce, up $28.90. Crude oil fell to $92.63 a barrel, down 48 cents.
Among Canadian commodity producers, Suncor Energy Inc. fell 1.4 per cent and Barrick Gold Corp. rose 0.8 per cent.