US Stocks are rallying Tuesday, with the S&P 500 and the NAS up more than 2%, as buyers emerged before a highly anticipated address by US Federal Reserve Chairman Ben Bernanke later this week.
Technology and other growth stocks drove much of the market’s gains, with the S&P Information Technology Index .GSPF up 2.4%.
A weaker-than-expected reading of the US housing sector was the latest in a string of discouraging data that has raised expectations the US Fed will take measures to prop up the economy.
New US single-family home sales fell more than expected in July to hit a 5-month low.
Some are speculating the Mr. Bernanke could unveil measures to revive the struggling economy, though others say he is most likely to outline gradual actions, which would fall short of a 3rd round of Quantitative Easing.
Shares with historically high growth rates or expected to show strong growth were among Tuesday’s leaders after getting hit hard in recent weeks, analysts at Credit Suisse said in a note. Big percentage gainers on the S&P included tech shares Nvidia (NASDAQ:NVDA) and JDS Uniphase (NASDAQ:JDSU).
“Growth stocks that recently have been hurt the most are doing quite well today, which is encouraging, since in a tough correction or a bear market, growth stocks with higher valuations typically tend to decline more so than the market,” Lip said.
Even financials, which had been knocked lower early, turned positive, with the S&P Financials Index .GSPF up 1.9 percent.
UBS AG (NYSE:UBS) shares trading in the United States advanced 4.5% to 13.78. The bank said it plans to slash around 3,500 jobs in a cost-cutting measure.
But Bank of America Corp (NYSE:BAC) remained under pressure, with shares down 2.2% to 6.28, the biggest loss on the DJIA, on fears of possible write-offs and the need for capital.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world