NEW YORK – Maybe the sell-off was a little overdone.
That was the sentiment on Wall Street on Tuesday as the stock market broke a three-day losing streak. The gain pushed the Standard & Poor’s 500 index back into positive territory for the year.
The rebound was driven partly by bargain-hunting as investors picked up stocks that had fallen the most in the slump over the previous three days. Utilities stocks also rose sharply as skittish investors bought less-volatile stocks.
“Longer-term investors should really use this as an opportunity to buy attractive areas that have sold off,” said Kristina Hooper, US Investment Strategist at Allianz Global Investors. “For them, stocks are on sale.”
Stocks have had a volatile start to April. After closing at a record last Wednesday amid optimism about the improving outlook for the economy, stocks fell sharply on Friday as investors decided that some of the high-flying stocks in the technology and biotech sectors no longer justified their lofty valuations.
The S&P 500 rose 6.92 points, or 0.4 percent, to 1,851.96. The Dow Jones industrial average climbed 10.27 points, or 0.06 percent, to 16,256.14. The Nasdaq composite rose 33.23 points, or 0.8 percent, to 4,112.99.
Even as investors sent stocks higher, they were still being cautious. Investors typically buy utilities stocks when they are worried about volatility in the market. That’s because those companies pay big dividends and demand for the power they generate tends to be stable, regardless of how the economy is doing.
On Tuesday, utilities rose 1.5 percent. The sector has gained 10.5 percent this year, making it by far the best performing industry group in the S&P 500. Health care stocks are the next best performers, gaining 2.7 percent over the same period.
Technology stocks and consumer discretionary stocks, among the biggest decliners in the three-day sell-off, also logged gains on Tuesday.
Facebook rose $1.24, or 2.2 percent, to $58.19. Google’s class newly issued C shares rose $16.75, or 3.1 percent, to $554.90.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.68 percent from 2.70 percent on Monday.
Among other stocks making big moves:
• Whole Foods Market gained $1.09, or 2.2 percent, to $51.38 after analysts at UBS raised their price target for the stock to $70 from $62. The analysts are optimistic that the high-end grocery store chain will be able to increase its profit margins as it expands.
• Gilead Sciences fell $2.22, or 3.1 percent, to $70.01 following reports that Express Scripts, the largest U.S. pharmacy benefits manager, plans to ask its clients to join a coalition that would stop using Gilead’s Sovaldi Hepatitis C treatment once a rival medicine is approved for the U.S. next year.
• Dr. Pepper Snapple Group fell $2.06, or 3.8 percent, to $51.62 after Wells Fargo Securities cut their outlook for the company’s earnings. The analysts say that the stock has peaked and its beverages are continuing to lose market share.