NEW YORK — U.S. stocks advanced Tuesday, with the Standard & Poor’s 500 index rising above its average price during the past 100 days, as investors speculate the Federal Reserve won’t rush to raise rates amid uncertainty over Greece’s future
NEW YORK — U.S. stocks advanced Tuesday, with the Standard & Poor’s 500 index rising above its average price during the past 100 days, as investors speculate the Federal Reserve won’t rush to raise rates amid uncertainty over Greece’s future in the euro.
Aetna and UnitedHealth rose more than 2.1 percent amid bets that the health-insurance industry is headed for a round of mergers. Monster Beverage jumped 4.2 percent to lead consumer staples higher. Oracle and Adobe Systems gained more than 1.3 percent. United Rentals fell 2.6 percent after an analyst downgrade, and airline shares declined for a second day.
The S&P 500 index climbed 0.6 percent to 2,096.29 at the close in New York, erasing Monday’s slide. The Dow Jones industrial average added 113.31 points, or 0.6 percent, to 17,904.48. The Nasdaq composite index gained 0.5 percent. About 5.5 billion shares changed hands on U.S. exchanges Tuesday, 13 percent below the three-month average.
“We had a selloff the last few days, and we’re seeing a bounce back from an oversold condition,” said Matt Maley, an equity strategist at Miller Tabak in Newton, Massachusetts. “I don’t think anyone wanted to be caught short ahead of the Fed meeting. The situation in Greece is still up in the air and will be for a little while, but it doesn’t look like that’s holding investors back today.”
The Federal Reserve concludes its two-day meeting Wednesday, and officials are expected to leave interest rates unchanged after the economy contracted in the first quarter amid harsh winter weather. Policy makers anticipate growth will rebound enough to potentially allow for a rate increase this year.
Recent data from retail sales to wage growth have been improving, though disappointing factory data Monday increased investor uncertainty as to whether the rebound is strong enough to withstand a rate increase.
A report Monday showed May housing starts totaled 1.04 million at an annualized rate following April’s revised 1.17 million pace, capping the best back-to-back readings since the last two months of 2007. The median estimate of economists surveyed by Bloomberg called for 1.09 million. Permits for future projects climbed to the highest level in almost eight years.
Investors continue to look for indications of progress in Greece’s debt talks after the Mediterranean nation signaled it won’t make further concessions to unlock bailout funds needed to avoid default. German Chancellor Angela Merkel struck a more conciliatory tone, saying she’ll “do everything possible to keep Greece in the euro zone.”
“The market correctly realizes that Greece is less of a risk than it was a few years back,” said Anthony Valeri, a market strategist with LPL Financial in San Diego. “Any kind of financial disruption is limited. Investors are correctly viewing this as more of an isolated incident that has far greater ramifications for Greece than it does for the global economy and financial markets.”
The Chicago Board Options Exchange Volatility Index slipped 3.8 percent to 14.81 Tuesday, as equities gained for the first time in three sessions. The gauge reached an 11-week high Monday.
Consumer staples shares rose the most in the S&P 500, the group’s first climb in four sessions, as all of the benchmark’s 10 main industries advanced. Staples are down 3.5 percent in the past month, worse than the S&P 500’s 1.3 percent retreat.
Coty jumped 19 percent to a record after a report that the Calvin Klein and Adidas fragrance maker won the auction for Procter & Gamble’s haircare unit and two beauty lines in deals which could reach a combined $12 billion. P&G added 1.3 percent.
Monster Beverage rallied 4.2 percent after Citigroup analysts added the company to the firm’s U.S. Focus List. Campbell Soup rose 2.6 percent, its biggest gain in five months, while Whole Foods had its biggest advance since April, up 1.7 percent. Coca-Cola and PepsiCo added at least 1 percent, with Coke posting its best increase in almost two months.
The health-care group climbed for the fifth time in six sessions. Perrigo advanced 4.3 percent, the most in the S&P 500, after Abbott Laboratories said it would vote its 14.5 percent stake in favor of Mylan’s $33 billion bid for Perrigo at a shareholder meeting on a potential deal in July or August. Mylan lost 2.1 percent, the most in a month.
UnitedHealth, Aetna and Anthem added at least 1.4 percent amid a drumbeat for consolidation in the health- insurance industry. Aerie Pharmaceuticals soared 50 percent, the most ever, after U.S. regulators let the company favorably alter the design of a trial for its glaucoma drug.
Energy companies rallied as oil rose for the first time in four days. Hess and Chesapeake Energy gained more than 2.6 percent.
SunEdison increased 2.3 percent after raising $402.5 million to help buy renewable energy plants in emerging markets. It also purchased more than 2 gigawatts of wind and solar projects in Central America and Asia.
Industrial shares were little changed as declines in airline shares weighed. American Airlines and United Continental dropped more than 1.4 percent. A Bloomberg index of U.S. carriers fell 0.9 percent.
Oshkosh slumped 7.1 percent, the biggest drop in almost 11 months. The maker of combat vehicles, heavy-duty trucks and other equipment cut its third-quarter and 2015 profit view, citing severe weather and potential rental industry consolidation. United Rentals lost 2.6 percent after it was downgraded to underperform from neutral at Macquarie Research.
Avalanche Biotechnologies Inc. shares tumbled 56 percent, the most since it went public last July, after some patients in a safety study of its gene therapy for an age-related chronic eye disease still required injections from another drug.
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With assistance from Roxana Zega in Zurich and Annelise Alexander in New York.
