Stocks close higher, bond yields reach pre-pandemic high

Technology companies and banks led stocks higher on Wall Street Tuesday, more than making up the market’s losses a day earlier. The S&P; 500 rose 0.8%, the Dow Jones Industrial Average rose 1.1% and the Nasdaq rose 1.3%. Peloton jumped 25.3% after the exercise bike maker announced a corporate shake-up and big job cuts. Bond yields rose. The yield on the 10-year Treasury note rose to 1.96%, its highest level since before the pandemic began. The mostly muted trading this week follows weeks of volatility amid uncertainty over how aggressive the Fed will raise interest rates to fight inflation.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Technology companies and banks are leading stocks higher on Wall Street in afternoon trading Tuesday, placing the market on pace to more than make up for its losses a day earlier.

The S&P; 500 rose 0.7% as of 3:23 p.m. Eastern. The Dow Jones Industrial Average rose 348 points, or 1%, to 35,439 and the tech-heavy Nasdaq was up 1%.

Smaller company stocks outpaced the broader market in a potential sign that investors are optimistic about economic growth. The Russell 2000 rose 1.1%.

The indexes recovered after wavering between gains and losses in the early going as bond yields surged. The yield on the 10-year Treasury note rose to 1.95%, its highest level since before the pandemic began. The yield, which is used to set interest rates on mortgages and many other kinds of loans, traded at 1.91% late Monday.

Banks, which benefit from higher interest rates and rising bond yields, made solid gains. Bank of America rose 1.7%. Raw materials companies, including steelmakers and paper producers, also gained ground.

Technology companies accounted for a big slice of the S&P; 500’s rally. Apple rose 1.6%.

Chipmaker Nvidia rose 1.1% after shaking off an early loss following its announcement that it terminated its plan to buy chip designer Arm from Softbank.

Retailers and other companies that rely on direct consumer spending also helped lift the market. Amazon.com rose 1.9% and Home Depot gained 1.2%.

The price of U.S. crude oil fell 2.1% and weighed down energy stocks. Chevron fell 1.8%.

Peloton jumped 24.6% after announcing a corporate shake-up that included the resignation of its co-founder as CEO and big job cuts.

Investors continued reviewing the latest corporate earnings with mixed reactions. Pfizer fell 3.2% after giving Wall Street a discouraging profit and revenue forecast. Harley-Davidson jumped 15% after reporting a surprising fourth-quarter profit.

The mostly muted trading so far this week follows weeks of volatility for major indexes. Rising inflation and the Fed’s plan to raise interest rates to fight it have been key concerns for investors. Any increase in rates would mark an abrupt turnaround from much of the last two years, when ultra-low rates helped prices surge for everything from stocks to cryptocurrencies.

“We’re in a bit of a holding pattern right now,” said Ross Mayfield, investment strategy analyst at Baird. “A lot of the near-term indigestion is priced in.”

The latest report on consumer prices from the Labor Department on Thursday will give Wall Street another update on just how much inflation is hitting consumers’ wallets. Economists expect a 7.3% rise in inflation in January, which would show that inflation remains at its highest levels in four decades. That could add to concerns over how often the Fed moves to raise rates this year.

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