Stocks climbed Tuesday in a broad rally based on company earnings, some good news from China’s economy, and the hope that Japan’s struggling economy will get another boost.
At the close on Wall Street, the Dow Jones industrial average was up 222.6 points, about 1.4 percent at 16,196.4. The broader Standard & Poor’s 500 index closed up 30.8 points, about 1.7 percent, at 1,895.6. The Nasdaq composite closed with a gain of 98.4 points, about 2.3 percent, to nearly 4,436.
BEHIND THE GAINS: The rise has been underpinned by market gains in Asia and Europe, where investors are hoping for more central bank stimulus. Overall market sentiment remains fragile, however, due to ongoing concerns of low growth, weak inflation and falling oil prices.
IS TUMULT OVER? Few market participants are ready to say that the tumult of recent weeks is over. Joshua Mahony, market analyst at London-based brokerage IG, says it’s likely to be only “a matter of time before we see the sellers dominate once more.”
OIL PRICES: At midafternoon Tuesday, the price of U.S. benchmark crude was off 29 cents, nearly 1 percent, at $29.15 a barrel on the New York Mercantile Exchange. In London, the price of the international benchmark, Brent crude, was down $1.11 cents, about 3.3 percent, at $32.28. The benchmark prices slipped despite a deal among producers to cap production in hopes of nudging the price up.
OIL MINISTERS FREEZE PRODUCTION: Oil prices fell despite a deal that could shore up oil prices. Russia and Saudi Arabia said Tuesday they had reached a deal to freeze their oil output, but the deal won’t take effect unless other OPEC nations also agree to it. Analysts say Iran probably won’t sign on because it wants to increase production following its period of sanctions.
Several times in recent days, oil prices have risen because investors hoped that major oil-producing countries would reach a deal that would reduce production and begin to reduce the worldwide oversupply. The agreement announced Tuesday wouldn’t cut production, but it would stop it from growing further.