(Reuters) – U.S. stocks crept higher on Wednesday as volatility eased and buyers returned to a market that is recovering from a record fall for the Dow Jones Industrial Average earlier this week.
Gains were broad based, with ten of the 11 major S&P sectors higher. The industrial, financial and consumer discretionary stocks led advances on the S&P and the Dow.
Boeing (BA.N) rose 2.7 percent, providing the biggest boost to the Dow and S&P.
At 12:32 p.m. ET (1732 GMT), the Dow Jones Industrial Average .DJI was up 274.21 points, or 1.1 percent, at 25,186.98. The S&P 500 .SPX was up 19.78 points, or 0.73 percent, at 2,714.92, while the Nasdaq Composite .IXIC was up 17.09 points, or 0.24 percent, at 7,132.97.
The pivotal gauge of S&P 500 volatility, the VIX .VIX, opened at a relatively elevated 31 points, before slipping to 22.62. The VIX on Tuesday hit a more than two-and-a-half year high above 50, after trading, on average, below 20 for months.
“What we’re seeing is an attempt at stabilization in U.S. equity prices following a very sharp selloff,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.
“The very sharp rise in volatility that accompanied it has also settled back and the bottom line is that the economy remains very robust and corporate earnings are expected to grow. So we have a constructive landscape.”
The move lower will provide investors with cheaper stock valuations that are closer to historical norms and will be constructive for the market in the long term, Kenny said.
Traders are still braced for more volatility as they try to figure out if the swings of the past few days are the start of a deeper correction or just a temporary blip in the U.S. market’s nine-year bull run.
A wild session on Tuesday had seen the Dow swing more than 1,100 points from peak to trough and ended with the benchmark S&P 500 recording its best day since just before President Donald Trump’s election in 2016.
Trump, who has repeatedly praised Wall Street gains during his first year in office, on Wednesday dismissed recent market rout, saying stocks should not be falling amid strong economic news.
Some investors, however, fear the market is over-stretched in the context of higher inflation and rising bond yields as central banks withdraw their easy money policies of recent years. The recent rout has wiped about $4 trillion off world equities.
Wynn Resorts (WYNN.O) climbed 8.1 percent after casino mogul Steve Wynn resigned as the chief executive following sexual misconduct allegations. Snapchat owner Snap (SNAP.N) soared 37.8 percent after it reported surging growth in users and revenue in its latest quarter.
Advancing issues outnumbered decliners on the NYSE by 2,049 to 864. On the Nasdaq, 1,816 issues rose and 1,101 fell.
The S&P 500 index showed 3 new 52-week highs and 2 new lows, while the Nasdaq recorded 26 new highs and 33 new lows.
Reporting by Tanya Agrawal and Sruthi Shankar; Editing by Patrick Graham and Arun Koyyur