tocks jumped more than one per cent yesterday, a day after their worst decline since November, as gold prices rebounded and earnings from Coca-Cola and Johnson & Johnson improved the outlook for first-quarter results.
Inflation data, which reinforced expectations that the Federal Reserve will keep its stimulus plan in place, added to bullish sentiment.
The price of gold jumped after its record daily drop in dollar terms on Monday. The S&P 500 materials index climbed 1.9 per cent, leading the index higher.
“Yesterday I think was a bit out of line ... But I think the trend is that the market is consolidating, that we’re going to see a little bit of a pullback here over the next month and a half or so, and then we’ll get on to greener pastures,” said Brian Amidei, managing director at HighTower Advisors.
Coca-Cola shares rose 5.7 per cent to $42.37, after rising intraday to $42.48, their highest since 1998, and giving the Dow its biggest boost on the back of better-than-expected profits.
The stock of another Dow component Johnson & Johnson touched a record high of $83.54 after the diversified healthcare company reported better-than-expected first-quarter earnings. J&J shares ended up 2.1 percent at $83.44.
S&P 500 earnings are now expected to have risen 1.8 percent in the first quarter, based on actual results from 42 companies and estimates for the rest, up from a recent estimate of 1.1 percent growth.
The Dow Jones industrial average jumped 157.58 points, or 1.08 per cent, to 14,756.78 at the close. The Standard & Poor’s 500 Index gained 22.21 points, or 1.43 per cent, to 1,574.57. The Nasdaq Composite Index rose 48.14 points, or 1.50 per cent, to end at 3,264.63.