U.S. stocks posted sharp gains on Tuesday, with bank and energy stocks surging, as data showed U.S. consumer confidence soaring to a more than 16-year high.
The Dow Jones Industrial Average was on track to snap an eight-day losing streak, its longest since 2011. U.S. equities have surged to record highs in the wake of President Donald Trump’s election in November, but the rally had stalled this month.
U.S. consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February. The economy’s strengthening fundamentals were bolstered by other data showing further increases in house prices in January.
The data “underscore what has been going on really in this whole rally, and that is that confidence is pretty high and optimism is high and that has kind of been underpinning the resiliency of the equity markets,” said Jim Davis, regional investment manager at U.S. Bank Wealth Management in Springfield, Illinois.
The Dow Jones Industrial Average .DJI rose 172.26 points, or 0.84 percent, to 20,723.24, the S&P 500 .SPX gained 20.73 points, or 0.89 percent, to 2,362.32 and the Nasdaq Composite .IXIC added 46.25 points, or 0.79 percent, to 5,886.62.
Tuesday’s gains come after declines last week as investors fretted over Trump’s ability to enact his agenda after his fellow Republicans failed to pass their healthcare bill.
However, investors appear to have shrugged off the setback, choosing instead to focus on Trump’s promise of reforming the U.S. tax code, which has been a key driver in the post-election record rally.
“This market is driven by two things – the hope of policy agenda getting put into place and improving fundamentals,” said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
The financial and energy sectors, which have lagged the broader market this year, fueled the S&P 500 on Tuesday.
The financial sector .SPSY jumped 1.7 percent, with JPMorgan (JPM.N) and Bank of America (BAC.N) giving big boosts to the S&P 500. Energy shares .SPNY gained 1.2 percent, supported by stronger oil prices CLc1.
Apple (AAPL.O) rose 2.1 percent and gave the biggest boost to the S&P and the Nasdaq, as the shares hit an all-time high.
In corporate news, General Motors (GM.N) rose 2.9 percent after activist investor David Einhorn’s Greenlight Capital urged the carmaker to split its stock into two classes.
Advancing issues outnumbered declining ones on the NYSE by a 2.89-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored advancers.
The S&P 500 posted 18 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 78 new highs and 30 new lows.