Stocks surge as tensions ease in Ukraine

JOSHUA FREED AP Business Writer Published:

Relieved investors sent stocks sharply higher Tuesday after Russia pulled troops back from the border of Ukraine. The rally erased steep losses from Monday caused by fears an escalating conflict.

KEEPING SCORE: The S&P 500 index was up 24 points, or 1.3 percent, at 1,869 as of noon Eastern time Tuesday.

The Dow Jones industrial average rose 197 points, or 1.2 percent, to 16,365. The Nasdaq composite rose 71 points, or 1.7 percent, to 4,348. Almost eight stocks rose for every one that fell on the New York Stock Exchange.

RELIEF RALLY: The volatility comes after the S&P 500 closed at a record high on Friday, then posted its biggest decline in a month on Monday. That has left investors trying to figure out whether stocks are overvalued or whether they reflect an improving economy.

WHAT'S AN INVESTOR TO DO? "I think maybe you take a powder. Maybe take some positions off the table, and you hedge yourself a little but, for the chance that if it does go the other way and there is a downturn," said Stephen J. Carl, head equity trader at The Williams Capital Group.

GOING FOR RISK: Bond and gold prices fell as traders moved money out of safe-play assets. The yield on the 10-year Treasury note rose to 2.67 percent from 2.60 percent late Monday.

ENERGY PRICES: Oil prices also fell as the immediate threat of economic sanctions on Russia, a major oil exporter, eased. Traders had also been worried about disruptions in the Black Sea, a major transit point for oil.

WORLD MARKETS: Stock markets in Europe, including in Moscow and Asia, recouped much of Monday's losses. Indexes in France and Germany each rose more than 2.3 percent, and the FTSE 100 in Britain rose 1.7 percent.

THE SHACK PARES BACK: RadioShack Corp. plunged 40 cents, or 15 percent, to $2.32 after reporting a wider quarterly loss. The company also said it would close up to 1,100 stores.

BUYBACK BOUNCE: Chipmaker Qualcomm rose $2.96, or 4 percent, to $76.59 after announcing a 20 percent increase in its quarterly dividend and adding $5 billion to its stock buyback program. Buybacks generally benefit shareholders because they increase the value of remaining shares.

PENNEY GAINS: J.C. Penney Co. rose 60 cents, or 7.5 percent, to $8.56 after Standard & Poor's raised its outlook on the retailer's debt, saying Penney's performance "has begun to stabilize." Last week Penney posted its first gain in two years at stores open at least a year.

DELTA TAKES OFF: Delta Air Lines rose $1.48, or 4.5 percent, to $34.07 after reporting strong February domestic demand and passenger revenue.

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