NEW YORK (AP) — Stocks rallied Tuesday, ending a slump that had ushered in the New Year.
The Standard and Poor's 500 index climbed the most in three weeks, led by gains for health care stocks. UnitedHealth Group, the nation's largest health insurer, and Johnson & Johnson both climbed on recommendations for brokerage firms.
After three straight declines, the S&P 500 would have matched its worst opening of a year since 1978 had it closed lower for a fourth day. The stock market's slow start to 2014 contrasts with last year's exceptional performance, when the S&P 500 climbed to record levels after surging almost 30 percent.
"To me the trend still looks up, even though we've been chopping around," said Bill Stone, chief investment strategist at PNC Wealth Management Group. The economy "seems to be in the mode that you would expect corporate earnings to continue to grow."
The S&P 500 rose 11.11 points, or 0.6 percent, to 1,837.88, the biggest gain since Dec. 18. Nine of the 10 sectors that make up the index rose.
The Dow Jones industrial average climbed 105.84 points, or 0.6 percent, to 16,530.94 The Nasdaq composite gained 39.50 points, or 1 percent, to 4,153.18.
UnitedHealth group gained $2.27, or 3.1 percent, to $76.51 after analysts at Deutsche Bank said they expected the nation's largest health insurance company to charge customers more in premiums this year.
Johnson & Johnson climbed $1.96, or 2.1 percent, to $94.29 after analysts at RBC Capital raised their outlook on the stock to "outperform," in part due to optimism on sales of the diabetes drug Invokana.
Investors were also encouraged by the easy passage in a Senate vote late Monday of Janet Yellen's nomination to take the helm at the Federal Reserve. The vote puts an economist in the post who has backed the Fed's recent efforts to stimulate the economy with low interest rates and huge bond purchases.
The confirmation is a reminder that the Fed's policies of stimulating the economy will likely continue, said Kristina Hooper, U.S. Investment Strategist at Allianz Global Investors.
"It's just a nice little halo effect," said Hooper.