Stocks surge, putting a shaky few weeks further behind them

Stocks around the world jumped Tuesday, and the Standard & Poor’s 500 had one of its best days of the year, as markets put a shaky couple of weeks further behind them.

Shares of technology companies and retailers helped lead the way in the United States. And with markets in a less nervous mood, prices for Treasury bonds, gold and other go-to investments for turbulent times fell.

The Standard & Poor’s 500 climbed 24.14 points, or 1%, to 2,452.51 for its fourth-biggest gain of the year. It’s taken just two days for the index to recoup half the loss it sustained in the two weeks since setting a record Aug. 7. Those two weeks were a jolt for markets, as worries rose about political strife in Washington and abroad.

The Dow Jones industrial average rose 196.14 points, or 0.9%, to 21,899.89 on Tuesday. The Nasdaq composite jumped 84.35 points, or 1.4%, to 6,297.48.

It’s the latest example of investors seeing drops in the market as opportunities to buy, not reasons to unload stocks.

“We’ve seen these blips of volatility this year, and we have tended to calm down very quickly afterward,” said Jon Adams, senior investment strategist at BMO Global Asset Management.

He pointed in part to increased optimism that the U.S. will avoid a default on the federal debt. The Senate’s majority leader said Monday that there is “zero chance” Congress will vote against increasing the country’s borrowing limit.

Many analysts are expecting markets to drift sideways in upcoming weeks, with few market-moving events on the calendar.

One highlight could be the symposium for central bankers from around the world in Jackson Hole, Wyo., at the end of this week. The Federal Reserve is raising interest rates and is preparing to pare the $4.5 trillion it holds on its balance sheet, and investors are wondering when the European Central Bank will follow suit.

The heads of the Fed and the European Central Bank are expected to speak at the symposium, and if either suggests a more aggressive pace than investors expect, it probably would prompt markets to tumble. But investors say the Fed in particular has been meticulous in setting expectations so markets aren’t taken by surprise.

“We wouldn’t expect much market moving overall,” Adams said.

If markets do calm down, it would mark a return to a smooth ride for investors. The S&P 500 is up 9.5% for the year, and the climb had been a remarkably placid one until two weeks ago. It had just two days this year when it fell 1% or more, before doubling that tally during the last two weeks.

Technology companies led the way, and those in the S&P 500 rose 1.5% for the biggest gain among the 11 sectors that make up the index.

Macy’s jumped 4.6% to $20.42, one of the largest gains in the index, after it said that an EBay executive, Hal Lawton, would become its president and that it is restructuring its organization to drive more sales and cut costs.

Shoe retailer DSW surged 17.5% to $18.43 after it reported stronger earnings and revenue for the latest quarter than analysts expected.

The ebullient tone led investors to sell Treasury bonds, which are considered among the safest investments. That in turn pushed up yields. The 10-year Treasury note’s yield rose to 2.21% from 2.18%.

The dollar rose to 109.52 yen from 108.85 yen. The euro fell to $1.1752 from $1.1813, and the British pound fell to $1.2828 from $1.2901.

Benchmark U.S. crude rose 27 cents to settle at $47.64 a barrel. Brent crude, the international standard, rose 21 cents to $51.87 a barrel.

Natural gas fell 2 cents to $2.94 per 1,000 cubic feet, heating oil stayed at $1.59 a gallon, and wholesale gasoline rose a penny to $1.59 a gallon.

Gold fell $5.70 to $1,291.00 an ounce. Silver fell 3 cents to $16.98 an ounce. Copper rose 1 cent to $2.99 a pound.

Markets abroad were strong. In Europe, Germany’s DAX jumped 1.4%, France’s CAC 40 rose 0.9%, and Britain’s FTSE 100 gained 0.9%

In Asia, Hong Kong’s Hang Seng climbed 0.9%, South Korea’s Kospi added 0.4% and the Nikkei 225 in Japan was virtually flat.

UPDATES:

4 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 8:50 a.m.