Stocks rose sharply in early trading on Wall Street Tuesday, following big gains in Europe, as investors got back their appetite for risk.
European markets jumped after the head of the European Central Bank said it was ready to cut interest rates and provide other economic stimuluses if necessary. That puts the spotlight on the Federal Reserve, which is set to announce its own decision on interest rates Wednesday.
Technology companies including Apple and chipmakers like Intel and Nvidia rose sharply. Apple, Intel and Nvidia led broad gains in the technology sector. Facebook and Google’s parent company, Alphabet, led communications and internet stocks higher.
Industrial and consumer-related stocks also made big gains. General Electric, Caterpillar, and Nike all rose. Utilities and consumer products companies lagged the market in a sign that investors were stepping back from the safe-play sectors and taking on more risk.
KEEPING SCORE: The S&P 500 index rose 1.1% as of 10:30 a.m. Eastern time. The Dow Jones Industrial Average rose 291 points, or 1.1%, to 26,401. The Nasdaq, which is heavily weighted with technology companies, rose 1.7%. The Euro Stoxx 50 rose 2.1%
FACEBOOK GOES CRYPTO: The social media company rose 1.4% after unveiling plans to create a new digital currency similar to Bitcoin for global use.
The new currency, called Libra, has the potential to drive more e-commerce on its services and boost ads on its platforms. Facebook is partnering with PayPal, Uber, Spotify, Visa and Mastercard on the system.
FIRM DEALS: Mattress company Tempur Sealy International rose 5.3% after it announced several distribution deals. The deals with retailers Mattress Firm, Big Lots and Beter Bed Holding are expected to add $400 million in annual sales once the product launches are complete.
BONDS: U.S. government bond prices rose sharply early following the U.S. move to send 1,000 more troops to the Middle East as tensions in the Persian Gulf mount over Iran’s announcement it will not comply with the international agreement that keeps it from making nuclear weapons.
They gave back those gains following a tweet from President Donald Trump saying he plans to meet with Chinese President Xi Jinping at the Group of 20 summit in Osaka, Japan, later this month. Investors are hoping that the U.S. and China can resolve their trade war soon to avoid a sharper slowdown in global growth.
The yield on the 10-year Treasury note fell as low as 2.02% in early trading Tuesday, well below the 2.08% it traded at late Monday. By mid-morning it was back up at 2.06%.
That’s still well below the 2.21% yield on the three-month Treasury bill.
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