U.S. stocks rebounded Tuesday and climbed after a survey showed consumer confidence is at a nine-year high, a sign Americans will keep spending in the months to come. Technology and consumer stocks made the largest gains.
The market opened lower after two days of losses but quickly recovered. The consumer confidence report gave major indexes a boost and they locked in a big gain by early afternoon.
Technology companies jumped, and solid results from cruise line operator Carnival sent travel-related companies higher. Energy companies slumped with oil prices as hopes for an international cut in fuel production faded.
U.S. consumer confidence reached its highest level this month since August 2007, according to the Conference Board. .
Katie Nixon, chief investment officer for Northern Trust, said “Everything’s riding on the consumer right now.” Recently investors have worried about consumer spending because of disappointing auto sales and retail sales.
After its slow start, the Dow Jones industrial average jumped 133.47 points, or 0.7 percent, to 18,228.30. The S&P’s 500 index picked up 13.83 points, or 0.6 percent, to 2,159.93. The Nasdaq composite gained 48.22 points, or 0.9 percent, to 5,305.71.
Economists had expected consumer confidence would fall in September. That’s partly because of disappointing reports on car and retail sales earlier this month. Investors have been wondering if consumers would spend enough to keep the economy growing at a steady pace.
Travel companies made some of the biggest gains on the S&P 500 after cruise operator Carnival reported a solid profit and strong revenue in the third quarter and raised its forecast for its full-year results.
Amazon rose $16.95, or 2.1 percent, to $816.11 as consumer stocks made big moves. Microsoft helped pull tech stocks higher as it picked up $1.05, or 1.8 percent, to $57.95. IBM advanced $2.79, or 1.8 percent, to $156.77.
Oil prices fell after investors were disappointed again that OPEC countries didn’t make a deal to limit production. A representative for Iran said there probably won’t be any agreement this week and oil-producing nations should discuss the issue in November.
U.S. crude fell $1.26, or 2.7 percent, to $44.67 a barrel in New York. The international standard, Brent crude, lost $1.38, or 2.9 percent, to $45.97 a barrel in London. Oil prices rose 3 percent on Monday. Devon Energy lost $1.26, or 3.2 percent, to $38.38 and ConocoPhillips sank 59 cents, or 1.5 percent, to $39.43.
American Express gained 86 cents, or 1.4 percent, to $64.28. A federal appeals court ruled late Monday that the company didn’t violate antitrust laws by preventing stores from asking customers to use one credit card over another and steering consumers to another type of payment. On Tuesday, the company said it will buy back as much as 150 million shares of its stock and raised its dividend to 32 cents from 29 cents.
Oil and natural gas company Rice Energy said it will buy Vantage Energy for $2.7 billion including debt.
Bond prices continued to rise. The yield on the 10-year Treasury note fell to 1.56 percent from 1.58 percent. Bond yields have been slipping for more than a week as investors waited for the Fed to make a decision on interest rates. Last Wednesday it announced it was leaving rates where they are for now.
Geo Group and Corrections Corp. of America slumped after Democratic candidate Hillary Clinton said during the presidential debate Monday night that states should stop doing business with private prisons. In August the federal government said the Justice Department would stop doing business with those prison companies. Corrections Corp. lost $1.18, or 7.4 percent, to $14.78 and Geo Group slid 94 cents, or 3.8 percent, to $23.68.
Chesapeake Energy fell following another sign Carl Icahn is reducing his involvement with the company. Chesapeake said two directors resigned from its board. One of them, Vincent Intrieri, is a longtime associate of Icahn. Earlier this month Icahn cut his stake in the company to 4.6 percent from 9.4 percent. The stock slid 39 cents, or 5.9 percent, to $6.23.
Gold fell $13.70, or 1 percent, to $1,330.40 an ounce. Silver fell 43 cents, or 2.2 percent, to $19.17 an ounce. Copper lost 3 cents to $2.17 a pound. The dollar fell to 100.27 yen from 101.34 yen. The euro slid to $1.1221 from $1.1255.
France’s CAC-40 lost 0.2 percent while Germany’s DAX fell 0.3 percent. The FTSE 100 index of leading British shares was 0.2 percent lower. Hong Kong’s Hang Seng index rose 1.1 percent and Tokyo’s Nikkei 225 gained 0.8 percent. Seoul’s Kospi advanced 0.9 percent.
In other energy trading, heating oil declined 4 cents, 2.7 percent, to $1.41 a gallon. Wholesale gasoline fell 1 cent to $1.39 a gallon; natural gas remained at $3 per 1,000 cubic feet.