US stocks rally, regaining lost ground
NEW YORK: US stock markets jumped more than one percent on Tuesday, giving investors some relief after a six-week losing streak culminated in a brutal sell-off last week.
The Dow Jones Industrial Average was up 123.14 points (1.03 percent) to reach 12,076.11 in final trade.
The broader S&P 500 index rose 16.04 points (1.26 percent) to 1,287.87, while the tech-heavy Nasdaq Composite surged 39.03 points (1.48 percent) to 2,678.72.
The gains came after the release of better-than-expected data on retail sales and wholesale inflation, which showed that the US economic recovery was weak, but still on track, analysts said.
The data was "not as bad as feared but not exactly great news," said Marc Pado of Cantor Fitzgerald. "And yet the market responded with a nice surge."
US retail sales fell 0.2 percent from April, a less steep drop than the consensus estimate of 0.7 percent.
Meanwhile wholesale inflation came in at 0.2 percent, outpacing analysts' consensus estimate of 0.1 percent.
Earlier, China released data indicating that inflation in the world's second-largest economy was 5.5 percent, the highest in three years.
The Chinese data eased fears that the global economy was slowing sharply, sparking rallies in Asian and European markets.
"Today's data from abroad and at home is consistent with the soft-patch view as opposed to the rumblings of a global economy moving toward another recession," said Patrick O'Hare of Briefing.com.
Shares of JC Penney surged 17.5 percent after the clothing retailer announced it was hiring a new chief executive from Apple.
Electronics retailer Best Buy jumped 4.6 percent after earnings beat expectations.
US markets have been bearish in recent weeks as investors have fretted about a slowing economic recovery. The Dow lost around seven percent from late April to early June.
Bond prices fell. The yield on the 10-year US Treasury note rose to 3.10 percent from 2.99 percent on Monday, while that on the 30-year bond rose to 4.30 percent from 4.21 percent.
Bond prices and yields move in opposite directions.
Copyright AFP (Agence France-Presse), 2011
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