Banks, energy companies lead stocks higher on Wall Street

The agreement comes as pressure intensifies on Congress and the White House to reach a deal on another economic aid package before a temporary boost in aid for unemployed Americans expires at the end of the month. Hope for more economic aid from the government, following Europe's example, is a key force behind the market's latest gains, said Kristina Hooper, chief global market strategist for Invesco.

Banks and energy companies are leading stocks broadly higher on Wall Street in afternoon trading Tuesday, as the market extends its recent run of gains. The S&P 500 was up 0.6 per cent. That followed strength in markets overseas as investors welcomed news that European leaders have agreed on a budget and coronavirus relief fund worth more than USD 2 trillion. The agreement comes as pressure intensifies on Congress and the White House to reach a deal on another economic aid package before a temporary boost in aid for unemployed Americans expires at the end of the month.

Hope for more economic aid from the government, following Europe's example, is a key force behind the market's latest gains, said Kristina Hooper, chief global market strategist for Invesco. “The U.S. does not have the safety net that Europe has,” she said. “This is an environment in which there is going to be a need for more fiscal stimulus or you could see real hit to consumers.” Investors also have their eye on the latest batch of quarterly report cards from companies. Coca-Cola and Philip Morris International rose after the companies reported earnings in the latest quarter that beat analysts' forecasts.

The Dow Jones Industrial Average was up 303 points, or 1.1 per cent, to 26,984. The Nasdaq was down 0.3 per cent a day after notching its best day since the end of April and its latest all-time high. Small company stocks were faring better than the rest of the market. The Russell 2000 index climbed 1.8 per cent. Treasury yields were mostly lower, continuing to reflect caution in the market.

Energy companies were the biggest gainers among the 11 sectors in the S&P 500, by far, as the price of oil headed higher, an encouraging sign that markets hope economies will continue to recover..