US shares rally on economic recovery confidence
NEW YORK: Wall Street shares climbed Tuesday amid confidence the global economy has emerged from recession underscored by Australia's decision to raise interest rates.
The blue chip Dow Jones Industrial Average lifted 102.93 points (1.07 percent) to 9,702.68, a day after jumping by more than 100 points.
The technology-heavy Nasdaq composite added 23.22 points (1.12 percent) to 2,091.37 while the Standard Poor's 500 index increased 12.61 points (1.21 percent) to 1,053.07.
The market opened on a bullish note after Australia on Tuesday became the first advanced economy to raise interest rates since the financial crisis.
Although the United States is unlikely to raise rates in the near future as it still undergoes the painful transition of emerging from recession, investors saw the move as a key indication of global recovery.
"It is clear that there is a psychological bid in the market as the symbolism of the first rate hike from a G20 nation is trumping any negative considerations that go hand-in-hand with higher rates," said Patrick O'Hare of Briefing.com.
"That symbolism shines through in the fact that most equity markets around the globe have gained at least 1.0 percent in the wake of the rate hike announcement," he said.
The rate hike is being interpreted as "another confirmation that the world is back from the brink of economic disaster," O'Hare said.