Wall Street recouped some recent losses on Tuesday as investors sought cheap assets after a two-day equities rout sparked by Britain’s decision to leave the European Union.
U.S. indexes joined stock markets around the world in the rebound after global equity markets had shed $3 trillion in value in the two days following Britain’s shock vote, according to S&P Dow Jones Indices.
Financials and tech stocks, hit hard in the wake of the referendum, were among the best-performing sectors on Tuesday.
“People are starting to say maybe this is going to take longer than they thought and maybe the impacts on the U.S. market won’t be nearly as great as feared,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. “So I think you’ve seen a bit of bargain hunting.”
The Dow Jones industrial average (DJI) was up 186.41 points, or 1.09 percent, at 17,326.65, the S&P 500 (SPX) gained 25.42 points, or 1.27 percent, at 2,025.96 and the Nasdaq Composite (IXIC) added 78.39 points, or 1.71 percent, at 4,672.83.
Nine of 10 S&P sectors were positive. Energy shares (SPNY) gained 2.1 percent, leading all groups, supported by higher oil prices.
Major U.S. indexes had posted their worst two-day decline in 10 months following the British referendum.
Investors are still bracing for volatility in the coming weeks amid uncertainty about how Britain will pursue its EU exit, with some pointing to more possible downside. The S&P 500 was within 17 points of its record high last Thursday.
In support of stocks, data on Tuesday showed economic growth slowed in the first quarter but not as sharply as previously estimated, with gains in exports and software investment partially offsetting weak consumer spending.
“In a market that was chaotically falling, I think even average numbers would have provided some support, but the numbers were actually mildly bullish for the economy,” Meckler said.
Gilead Sciences (O:GILD) shares gained 4.2 percent after the large biotechnology company won U.S. approval for a hepatitis C medicine.
Endo International (O:ENDP) shares surged 17.3 percent, the top performer on the S&P 500, as the drugmaker announced a new patent.
Advancing issues outnumbered declining ones on the NYSE by 2,622 to 439, for a 5.97-to-1 ratio on the upside; on the Nasdaq, 2,331 issues rose and 519 fell for a 4.49-to-1 ratio favoring advancers.
The S&P 500 posted 16 new 52-week highs and 2 new lows; the Nasdaq recorded 22 new highs and 39 new lows.