U.S. stocks market jumped up on Tuesday driven by a rally in oil prices and a number of stronger quarterly financial reports. The Dow Jones Industrial Average increased 1.75% to 16,163.19. The S&P 500 rose 1.41% to 1,903.63, while the Nasdaq Composite was up 1.09% to 4,567.67. The gains in stock market came from the back of a rally in oil prices. Crude oil price in New York increased 3.7% to $31.45 per barrel.
“Today’s a little bit of a bounceback day for crude oil, and it seems like we’re still following energy,” said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. “The real question is at what point does the correlation [between oil and stocks] start to mitigate a bit.”
U.S. Stock market also boost by several companies’ strong quarterly financial results. Moreover, the Conference Board’s index of consumer confidence increased in January to the highest level since October 2015, even the market’s gyrations.
“On a day like today, you have earnings coming in nicely and consumer confidence inching up higher, suggesting that some of the important pillars of the U.S. economy aren’t doing as bad as some fear,” said Stephen Freedman, a senior investment strategist with UBS Wealth Management Americas.
While the U.S. Federal Reserve is not expected to move on interest rates at its two-day meeting, which began on Tuesday, investors will parse the Fed's commentary to gauge how recent global turmoil affects the central bank's outlook.
Johnson & Johnson (NYSE:JNJ) was the biggest influence on the S&P, rose 4.91% to $101.13, while Procter & Gamble Co (NYSE: PG) up 2.46% to $78.81. Both companies reported profits that beat expectations. Exxon Mobil Corporation (NYSE: XOM) climbed 3.62% to $76.70, while Chevron Corporation (NYSE: CVX) increased 3.99% to $84.12. 3M Co. (NYSE: MMM) surged 5.3% to $144.79, giving the biggest boost to the stock market, after it reported strong quarterly profits.
According to the data from Thomson Reuters, even these strong quarterly financial results, profit expectations for this quarter still weak, with earnings at S&P 500 companies on average expected to fall 4.9%.