Investors rallied behind an encouraging report on the Chinese economy as well as strong quarterly results from Apple and other big companies.
The market continues on its recovery from last week’s swoon and has now erased much of its losses over the last two weeks.
“I think it’s too early to call this a new rally, but I think there are definite signs that investors are gaining confidence again after last week’s volatility,” said Kristina Hooper, head of U.S. investment strategies at Allianz Global Investors.
The Standard & Poor’s 500 index added 37.27 points, or 2 percent, to 1,941.28. The Dow Jones industrial average rose 215.14 points, or 1.3 percent, to 16,614.81. The Nasdaq composite rose 103.40 points, or 2.4 percent, to 4,419.48.
This week so far has been a contrast to last week’s turbulence in many ways. Volatility is down, the S&P 500 index is on pace to have its best week of the year and the price of crude oil has stopped sliding. The bond market has also stabilized, with the 10-year Treasury note remaining around 2.20 percent for the last several days.
Since falling to a six-month low last week, the stock market has now basically recovered nearly all of its losses. After closing at 1,862.49 on Oct. 15, the S&P 500 index has rallied more than 4 percent in four days.
One notable part of the market investors have been moving back into is smaller, riskier companies. While the S&P 500 and Dow are still down 1.6 percent to 2.5 percent this month, respectively, the Russell 2000 is up 1 percent for October.
Apple gave a boost to the overall market. It rose $2.71, or 2.7 percent, to $102.47 after its quarterly results easily beat analysts’ expectations.
Apple said it earned $1.42 a share last quarter, helped by strong sales of the latest version of its phone.
Investors also had an encouraging report out of Asia. China’s economy expanded by 7.3 percent in the third quarter from a year earlier. Although growth slowed slightly from the previous quarter’s 7.5 percent, analysts had expected a more marked slowdown, to 6.9 percent.
China has been a worry spot for investors for many weeks, and has been a key reason why financial markets have been volatile lately. Signs of a slowdown in Europe have also been worrying investors.
In commodities, oil prices were rising after weeks of declines. Crude gained as the better-than-expected economic data from China suggested higher global demand for oil. Benchmark U.S. crude rose 10 cents to close at $82.81 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 82 cents to close at $86.22 on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX, wholesale gasoline rose 1.3 cents to close at $2.213 a gallon, heating oil rose 2.7 cents to close at $2.513 a gallon and natural gas rose 4.1 cents to close at $3.711 per 1,000 cubic feet.
The recovery in oil prices helped send energy stocks higher. The energy sector in the S&P 500 jumped 2.9 percent Tuesday, by far the biggest gain of the 10 sectors in the index.
In metals trading, gold rose $7 to $1,251.70 an ounce, silver rose 20 cents to $17.55 an ounce and copper rose four cents to $3.03 a pound.