Mar 4, 2014 4:15 PM
NEW YORK - Stocks roared back on Tuesday as fears eased of a possible military confrontation between Russia and Ukraine.
The Standard & Poor's 500 climbed to a high, gaining 28 points to end the day at 1,874 points, topping its previous record of 1,859 on Feb. 28. The Dow Jones industrial average rose 228 points, or 1.4 percent, to close at 16,396. points. The Nasdaq composite index also advanced in hitting a 14-year high.
"The fears that gripped the markets on Monday have already begun to fade as all sides appear ready to step back from the brink," analysts with Capital Economics said.
The gains follow hefty losses in U.S. equities and other risky assets on Monday. Global stocks rebounded while gold, the Japanese yen and Treasuries prices fell. Crude oil prices, up more than 2 percent on Monday, reversed some of that session's gain.
"Monday's selling and Tuesday's stark reversal have become commonplace in traders' calendars in 2014," said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut.
"Investors have clearly got an appetite for equities displaying strong momentum no matter whether geopolitical risks or fears for the health of the recovery stand in their path."
The CBOE Volatility index, Wall Street's so-called fear gauge, fell 11.9 percent to 14.09, on Tuesday after rising 14 percent in the previous session.
Global financial markets rebounded after Russian President Vladimir Putin said there was no need to use military force in the Crimea region for now. Putin ordered troops involved in a military exercise near the Ukrainian border back to their bases as he sought to ease tensions a day after Russian stocks, bonds and currency were hammered.
"The longer-term trend of the U.S. equity indexes remains positive," but short-term indicators "remain overbought and are peaking as most indexes rally back to resistance at their 2014 highs," said Robert Sluymer, analyst at RBC Capital Markets, LLC in New York.
Disney shares hit a record high after reaching a deal with Dish Network that allows the No. 2 satellite TV provider to carry Disney-owned networks such as ABC and ESPN, and deliver the content outside of a traditional TV subscription. Disney shares were last up 2.8 percent at $81.65 after earlier hitting $82.17.
Shortly before the end of the trading session, shares of RadioShack (RSH) were down 16.2 percent to $2.28. The struggling retailer said it would close up to 1,100 U.S. stores after a huge drop in holiday sales.