By Sue Chang, MarketWatch , Chris Matthews
Strong JOLTS report revives confidence in economy
It was a sea of green on trading screens Tuesday as U.S. stocks extended their rally as the session progressed on upbeat earnings reports and robust economic data, helping the market to shake off the previous day's weakness.
The tech sector, which had led the decline on Monday, bounced back resoundingly to lead the market, on pace for its 22nd session of more than 2% move this year.
What are the benchmarks doing?
The Dow Jones Industrial Average rose more than 500 points at its peak and remained up 487 points, or 1.9%, at 25,737. The S&P 500 gained 54 points, or 2%, to 2,805 with tech and health-care sectors advancing. The Nasdaq Composite Index climbed 192 points, or 2.6%, to 7,622.
The S&P 500 has dropped in seven of the past eight sessions, while the Dow slipped in four of the past five, underscoring a mostly downbeat cycle for U.S. equities of late. On Monday, stocks failed to defend early gains with all major indexes finishing lower .
What's driving markets?
Stocks are expected to increasingly take their cue from the corporate sector with third-quarter earnings season under way in earnest this week.
In recent sessions, investors have been concerned over the pace of rising bond yields, global trade tensions and questions about economic growth, factors that have had an outsize impact on large-capitalization tech-related names with overseas operations.
Investors are awaiting the Treasury Department's semiannual currency report. The report, and any accompanying statements by Treasury Secretary Steven Mnuchin, will be parsed for any signs that the U.S. deems China a currency manipulator.
Late Monday, the Treasury said the U.S. government ran its largest budget deficit in six years during the fiscal year that ended last month. The deficit totaled $779 billion in the fiscal year that ended Sept. 30, up 17% from $666 billion in fiscal 2017.
Meanwhile, the market has also closely watched negotiations between the European Union and Britain as it attempts to exit from the trade bloc with a trade agreement in hand. The potential for a clash between Italy and the European Union over Rome's budget plans is also in the spotlight. Both matters threaten to disrupt global markets should they sour.
Which data are in focus
U.S. industrial production rose 0.3% in September , according to the Federal Reserve, beating Wall Street expectations of 0.1%, according to a MarketWatch Survey.
The number of job openings in the U.S. reached another all-time high of 7.1 million in August, according a report released Tuesday morning by the Labor Department. The same report showed that American workers were voluntarily quitting their jobs at a rate of 2.4% in August, matching the July reading, which was the highest since 2001.
The National Association of Home Builders Confidence Index ticked up one point to 68 in October, though it remains down from a cycle high of 74, reached in December of 2017.
What are analysts saying
Tuesday's gains prove that last week's declines were "just normal volatility," rather than evidence of a fundamental shift in investor sentiment, said Jim Smigiel, chief investment officer of absolute return strategies at SEI.
Nevertheless, Smigiel argued that "the strongest gains in equity markets are behind us," and that volatility could be a constant companion for investors going forward as "chances of a surprise on the upside are lower than on the downside," when it comes to the broader U.S. economy.
Tech stocks were helping to lead the way due to "a healthy mix of positive sell-side commentary" and Adobe raising its revenue targets Monday evening , according to Joel Kulina of Wedbush Securities. "No doubt an uptick in risk appetite being seen as lack of any new negatives the early driver more than anything," he wrote in a note to clients.
Which stocks are in focus
Goldman Sachs Group rose 3% after the bank reported better than expected earnings per share of $6.28, versus analysts expectations of $5.38.
Morgan Stanley(GS) rallied 6% after it posted a 20% increase in profits to $2.15 billion. The retail brokerage's revenue grew to $4.4 billion for the quarter, 4% higher year-over-year.
Tesla shares climbed 6.3% after a federal judge approved the electric-car company and its Chief Executive Elon Musk's settlement with the Securities and Exchange Commission.
Shares of UnitedHealth Group Inc. (NFLX) gained 3.9%, helping to push the Dow higher, after the managed health-care company beat analysts earnings and revenue targets, while raising its outlook for full-year 2018 earnings .
Johnson & Johnson(NFLX) rose 1.4% after the consumer staples giant beat earnings and revenue estimates .The New-Jersey based firm also raised its earnings outlook for the year.
Adobe(NFLX) shares soared 8.6%, making the stock one of the S&P's top gainers, following its revenue growth update late Monday.
Streaming-video group Netflix was set to report after the close of trade. Its performance will be keenly watched by investors, given the company's place among so-called FANG names, including Facebook, Amazon and Google-parent Alphabet Inc., which have had a substantial influence on the broader market moves by dint of the market value of those companies.
How are other markets trading?
Asian stocks ended higher with Japan's Nikkei outperforming peers, while European indexes gained as Italian stocks surged.
Crude-oil prices rose moderately , while gold prices settled marginally higher and the U.S. dollar index traded flat .
--Mark DeCambre contributed to this report