Stock indexes finished mostly higher after a day of bouncing around Tuesday as retailers, energy companies and banks recovered some of their Monday losses, but technology companies struggled as Facebook dropped again.
Amazon led a rally among retailers, and it passed Alphabet, Google's parent company, as the second-most-valuable U.S.-listed company. Energy companies rose with oil prices. Banks rose along with bond yields as the leaders of the Federal Reserve met. The Fed leaders are expected to raise interest rates Wednesday.
Facebook sank after reports that the Federal Trade Commission will investigate its handling of user data and after authorities in the U.S. and Britain demanded answers from the social media giant. That came after reports that Cambridge Analytica, a data mining firm working for President Trump's 2016 campaign, improperly obtained data on 50 million Facebook users without those users’ permission.
Although Facebook stock regained a portion of its losses at the end of the day, it has fallen more than 9% this week. Social media companies Twitter and Snap also fell as investors considered the possibility that the government will pass new laws affecting their businesses.
“We don't know what's in store for an industry that isn't really regulated,” said Samantha Azzarello, global market strategist at JPMorgan Exchange Traded Funds.
The gainers Tuesday were mostly larger companies, which suffered the biggest losses Monday. Smaller companies struggled. More stocks fell than rose on the New York Stock Exchange.
After a drop of 1.4% on Monday, the Standard & Poor’s 500 index rose 4.02 points, or 0.2%, to 2,716.94. The Dow Jones industrial average gained 116.36 points, or 0.5%, to 24,727.27. The Nasdaq composite rose 20.06 points, or 0.3%, to 7,364.30. The Russell 2000 index of smaller-company stocks slipped 0.16 of a point to 1,570.41.
Amazon jumped 2.7% to $1,586.51, and Best Buy climbed 2.2% to $70.04. Industrial companies including Caterpillar recovered much of their Monday losses as well. Some major technology companies, includingMicrosoft and Nvidia, moved higher Tuesday after dropping the day before.
Facebook slid 2.6% to $168.15. The drop in the last two days is the worst for Facebook in two years, and it knocked Facebook from its perch as the fifth-most-valuable publicly traded company in the U.S. Warren Buffett's Berkshire Hathaway conglomerate, which owns insurance companies and railroads among many others, moved ahead of Facebook.
Other social media companies also sank: After sharp losses Monday, Twitter plunged 10.4% to $31.35, and Snap slid 2.6% to $16. Alphabet, which fell 3% on Monday, lost an additional 0.4%, closing at $1,095.80.
Oracle dropped 9.4% to $47.05 after releasing a quarterly report that disappointed investors. Although the company announced a bigger profit than analysts expected, investors were less impressed once items such as lower tax rates and stock repurchases were excluded, and Oracle’s sales were lower than Wall Street forecast. The company's forecast for the current quarter also fell short of estimates.
BlackBerry climbed 2.8% to $13.08 after the technology company announced a partnership with Microsoft.
The Federal Reserve's leaders began a two-day policy meeting that is expected to result in another interest rate increase Wednesday. The Fed has said it expects to raise interest rates three times this year, and a key debate on Wall Street is whether it will wind up increasing rates three times or four. The current meeting is the Fed's first since Jerome H. Powell became chairman, and investors will be watching his comments at a news conference Wednesday.
“Markets right now are hypersensitive to the Fed,” said Azzarello of JPMorgan. She said the Fed is trying to communicate clearly with investors and won't rush to raise interest rates.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.89% from 2.85%. When yields rise, that enables banks to charge higher interest rates on mortgages and other loans.
Banks and other financial companies rose, while companies that pay large dividends, including phone and utility companies, lost ground. Those stocks tend to fall out of favor with income-seeking investors when bond yields rise.
Benchmark U.S. crude rose $1.34, or 2.2%, to $63.40 a barrel in New York. Brent crude, used to price international oils, rose $1.37, or 2.1%, to $67.42 a barrel in London.
Wholesale gasoline rose 4 cents to $1.97 a gallon. Heating oil rose 4 cents to $1.95 a gallon. Natural gas ticked up 2 cents to $2.68 per 1,000 cubic feet.
Gold fell $5.90 to $1,311.90 an ounce. Silver fell 14 cents to $16.19 an ounce. Copper fell 4 cents to $3.04 a pound.
The dollar rose to 106.46 yen from 105.97 yen. The euro fell to $1.2253 from $1.2357.
Germany's DAX climbed 0.7%. The CAC 40 in France gained 0.6%. Britain's FTSE 100 closed up 0.3%. Japan's benchmark Nikkei 225 lost 0.5%, South Korea's Kospi gained 0.4%, and Hong Kong's Hang Seng edged up 0.1%.